The WACC of Lucisano Media Group SpA (LMG.MI) is 5.1%.
Range | Selected | |
Cost of equity | 5.8% - 8.5% | 7.15% |
Tax rate | 13.5% - 14.7% | 14.1% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 4.7% - 5.4% | 5.1% |
Category | Low | High |
Long-term bond rate | 3.7% | 4.2% |
Equity market risk premium | 8.3% | 9.3% |
Adjusted beta | 0.25 | 0.41 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 5.8% | 8.5% |
Tax rate | 13.5% | 14.7% |
Debt/Equity ratio | 2.6 | 2.6 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 4.7% | 5.4% |
Selected WACC | 5.1% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
LMG.MI | Lucisano Media Group SpA | 2.6 | 0.19 | 0.06 |
AVE.AT | Ave SA | 0.39 | 0.1 | 0.07 |
EMAN.L | Everyman Media Group PLC | 3.59 | 0.1 | 0.03 |
ITN.DE | Intertainment AG | 1.14 | -0.48 | -0.24 |
MTV.MI | Mondo TV SpA | 2.07 | -1.11 | -0.4 |
NPI.MI | Notorious Pictures SpA | 2.02 | -0.05 | -0.02 |
PAL.DE | Pantaflix AG | 0.36 | 0.34 | 0.26 |
PLI.WA | Platige Image SA | 0.48 | -0.09 | -0.06 |
SPM.DE | Splendid Medien AG | 0.11 | -0.35 | -0.32 |
ZIN.L | Zinc Media Group PLC | 0.25 | 0.23 | 0.19 |
Low | High | |
Unlevered beta | -0.04 | 0.04 |
Relevered beta | -0.12 | 0.12 |
Adjusted relevered beta | 0.25 | 0.41 |
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 LMG.MI:
cost_of_equity (7.15%) = risk_free_rate (3.95%) + equity_risk_premium (8.80%) * adjusted_beta (0.25) + 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.