LIN.PA WACC - Weighted Average Cost of Capital

The WACC of Linedata Services SA (LIN.PA) is 7.4%.

The Cost of Equity of Linedata Services SA (LIN.PA) is 8.80%.

The Cost of Debt of Linedata Services SA (LIN.PA) is 5.50%.

	Range	Selected
Cost of equity	6.70% - 10.90%	8.80%
Tax rate	25.20% - 25.90%	25.55%
Cost of debt	4.00% - 7.00%	5.50%
WACC	5.5% - 9.2%	7.4%

WACC

LIN.PA WACC calculation

Category	Low	High

Long-term bond rate	3.0%	3.5%
Equity market risk premium	5.8%	6.8%
Adjusted beta	0.63	1.02

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.70%	10.90%

Tax rate	25.20%	25.90%
Debt/Equity ratio	0.44	0.44
Cost of debt	4.00%	7.00%

After-tax WACC	5.5%	9.2%


Selected WACC	7.4%

LIN.PA'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 LIN.PA:

cost_of_equity (8.80%) = risk_free_rate (3.25%) + equity_risk_premium (6.30%) * adjusted_beta (0.63) + 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.