The WACC of Sixt Leasing SE (LNSX.DE) is 5.1%.
| Range | Selected | |
| Cost of equity | 7.10% - 11.90% | 9.50% |
| Tax rate | 24.70% - 38.90% | 31.80% |
| Cost of debt | 4.00% - 6.90% | 5.45% |
| WACC | 4.0% - 6.1% | 5.1% |
| Category | Low | High |
| Long-term bond rate | 2.6% | 3.1% |
| Equity market risk premium | 5.5% | 6.5% |
| Adjusted beta | 0.82 | 1.28 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.10% | 11.90% |
| Tax rate | 24.70% | 38.90% |
| Debt/Equity ratio | 2.99 | 2.99 |
| Cost of debt | 4.00% | 6.90% |
| After-tax WACC | 4.0% | 6.1% |
| 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 LNSX.DE:
cost_of_equity (9.50%) = risk_free_rate (2.85%) + equity_risk_premium (6.00%) * adjusted_beta (0.82) + 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.