LAVI.AT WACC - Weighted Average Cost of Capital

The WACC of Lavipharm SA (LAVI.AT) is 7.5%.

The Cost of Equity of Lavipharm SA (LAVI.AT) is 8.60%.

The Cost of Debt of Lavipharm SA (LAVI.AT) is 5.80%.

	Range	Selected
Cost of equity	7.00% - 10.20%	8.60%
Tax rate	38.00% - 47.60%	42.80%
Cost of debt	5.10% - 6.50%	5.80%
WACC	6.2% - 8.7%	7.5%

WACC

LAVI.AT WACC calculation

Category	Low	High

Long-term bond rate	3.3%	3.8%
Equity market risk premium	8.8%	9.8%
Adjusted beta	0.42	0.6

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.00%	10.20%

Tax rate	38.00%	47.60%
Debt/Equity ratio	0.27	0.27
Cost of debt	5.10%	6.50%

After-tax WACC	6.2%	8.7%


Selected WACC	7.5%

LAVI.AT's CAPM model and how its cost of Equity is calculated

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 LAVI.AT:

cost_of_equity (8.60%) = risk_free_rate (3.55%) + equity_risk_premium (9.30%) * adjusted_beta (0.42) + 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.