The WACC of Leonteq AG (LEON.SW) is 5.1%.
| Range | Selected | |
| Cost of equity | 9.40% - 19.70% | 14.55% |
| Tax rate | 11.60% - 14.90% | 13.25% |
| Cost of debt | 4.00% - 7.00% | 5.50% |
| WACC | 3.7% - 6.4% | 5.1% |
| Category | Low | High |
| Long-term bond rate | 1.0% | 1.5% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 1.64 | 2.91 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.40% | 19.70% |
| Tax rate | 11.60% | 14.90% |
| Debt/Equity ratio | 27.3 | 27.3 |
| Cost of debt | 4.00% | 7.00% |
| After-tax WACC | 3.7% | 6.4% |
| Selected WACC | 5.1% | |
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 LEON.SW:
cost_of_equity (14.55%) = risk_free_rate (1.25%) + equity_risk_premium (5.60%) * adjusted_beta (1.64) + 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.