LAVI.AT
Lavipharm SA
Price:  
0.81 
EUR
Volume:  
112,125.00
Greece | Pharmaceuticals
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LAVI.AT WACC - Weighted Average Cost of Capital

The WACC of Lavipharm SA (LAVI.AT) is 7.4%.

The Cost of Equity of Lavipharm SA (LAVI.AT) is 8.45%.
The Cost of Debt of Lavipharm SA (LAVI.AT) is 5.80%.

Range Selected
Cost of equity 7.00% - 9.90% 8.45%
Tax rate 38.00% - 47.60% 42.80%
Cost of debt 5.10% - 6.50% 5.80%
WACC 6.2% - 8.6% 7.4%
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 0.57
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.00% 9.90%
Tax rate 38.00% 47.60%
Debt/Equity ratio 0.25 0.25
Cost of debt 5.10% 6.50%
After-tax WACC 6.2% 8.6%
Selected WACC 7.4%

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 (8.45%) = 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.