LDO.MI
Leonardo SpA
Price:  
48.15 
EUR
Volume:  
4,462,465.00
Italy | Aerospace & Defense
Valuation
Overview
Financials
Forecast
Compare
Historical Price
SolvencyDividends
Transactions
People

LDO.MI WACC - Weighted Average Cost of Capital

The WACC of Leonardo SpA (LDO.MI) is 11.1%.

The Cost of Equity of Leonardo SpA (LDO.MI) is 12.40%.
The Cost of Debt of Leonardo SpA (LDO.MI) is 4.25%.

Range Selected
Cost of equity 11.30% - 13.50% 12.40%
Tax rate 11.50% - 17.40% 14.45%
Cost of debt 4.00% - 4.50% 4.25%
WACC 10.2% - 12.1% 11.1%
WACC

LDO.MI WACC calculation

Category Low High
Long-term bond rate 3.7% 4.2%
Equity market risk premium 8.3% 9.3%
Adjusted beta 0.92 0.95
Additional risk adjustments 0.0% 0.5%
Cost of equity 11.30% 13.50%
Tax rate 11.50% 17.40%
Debt/Equity ratio 0.17 0.17
Cost of debt 4.00% 4.50%
After-tax WACC 10.2% 12.1%
Selected WACC 11.1%

LDO.MI'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 LDO.MI:

cost_of_equity (12.40%) = risk_free_rate (3.95%) + equity_risk_premium (8.80%) * adjusted_beta (0.92) + 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.