LOV WACC - Weighted Average Cost of Capital

The WACC of Spark Networks SE (LOV) is 50.1%.

The Cost of Equity of Spark Networks SE (LOV) is 14.30%.

The Cost of Debt of Spark Networks SE (LOV) is 66.30%.

	Range	Selected
Cost of equity	10.70% - 17.90%	14.30%
Tax rate	17.40% - 22.40%	19.90%
Cost of debt	17.00% - 115.60%	66.30%
WACC	13.9% - 86.3%	50.1%

WACC

LOV WACC calculation

Category	Low	High

Long-term bond rate	4.2%	4.7%
Equity market risk premium	5.0%	6.0%
Adjusted beta	1.3	2.12

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.70%	17.90%

Tax rate	17.40%	22.40%
Debt/Equity ratio	20.48	20.48
Cost of debt	17.00%	115.60%

After-tax WACC	13.9%	86.3%


Selected WACC	50.1%

LOV'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 LOV:

cost_of_equity (14.30%) = risk_free_rate (4.45%) + equity_risk_premium (5.50%) * adjusted_beta (1.3) + 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.