The WACC of Landis+Gyr Group AG (LAND.SW) is 6.6%.
| Range | Selected | |
| Cost of equity | 5.10% - 9.00% | 7.05% |
| Tax rate | 11.60% - 14.40% | 13.00% |
| Cost of debt | 4.10% - 5.70% | 4.90% |
| WACC | 4.8% - 8.4% | 6.6% |
| Category | Low | High |
| Long-term bond rate | 1.0% | 1.5% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.8 | 1.15 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.10% | 9.00% |
| Tax rate | 11.60% | 14.40% |
| Debt/Equity ratio | 0.18 | 0.18 |
| Cost of debt | 4.10% | 5.70% |
| After-tax WACC | 4.8% | 8.4% |
| Selected WACC | 6.6% | |
The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.
This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.
Here’s how we figure out the cost of equity for LAND.SW:
cost_of_equity (7.05%) = risk_free_rate (1.25%) + equity_risk_premium (5.60%) * adjusted_beta (0.8) + risk_adjustments (0.25%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.