The WACC of Mevis Medical Solutions AG (M3V.DE) is 6.8%.
| Range | Selected | |
| Cost of equity | 7.50% - 11.30% | 9.40% |
| Tax rate | 1.40% - 1.70% | 1.55% |
| Cost of debt | 4.00% - 4.50% | 4.25% |
| WACC | 5.7% - 7.9% | 6.8% |
| Category | Low | High |
| Long-term bond rate | 2.0% | 2.5% |
| Equity market risk premium | 4.7% | 5.7% |
| Adjusted beta | 1.15 | 1.45 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.50% | 11.30% |
| Tax rate | 1.40% | 1.70% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 4.00% | 4.50% |
| After-tax WACC | 5.7% | 7.9% |
| Selected WACC | 6.8% | |
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 M3V.DE:
cost_of_equity (9.40%) = risk_free_rate (2.25%) + equity_risk_premium (5.20%) * adjusted_beta (1.15) + 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.