The WACC of Manz AG (M5Z.DE) is 5.9%.
| Range | Selected | |
| Cost of equity | 9.30% - 29.30% | 19.30% |
| Tax rate | 29.70% - 42.00% | 35.85% |
| Cost of debt | 4.00% - 7.00% | 5.50% |
| WACC | 3.8% - 8.0% | 5.9% |
| Category | Low | High |
| Long-term bond rate | 2.8% | 3.3% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 1.27 | 4.18 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.30% | 29.30% |
| Tax rate | 29.70% | 42.00% |
| Debt/Equity ratio | 5.41 | 5.41 |
| Cost of debt | 4.00% | 7.00% |
| After-tax WACC | 3.8% | 8.0% |
| Selected WACC | 5.9% | |
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 M5Z.DE:
cost_of_equity (19.30%) = risk_free_rate (3.05%) + equity_risk_premium (5.60%) * adjusted_beta (1.27) + 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.