MB.MI WACC - Weighted Average Cost of Capital
The WACC of Mediobanca Banca di Credito Finanziario SpA (MB.MI) is 7.8%.
| Range | Selected | |
| Cost of equity | 14.1% - 22.9% | 18.5% |
| Tax rate | 25.3% - 25.7% | 25.5% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.6% - 9.1% | 7.8% |
| Category | Low | High |
| Long-term bond rate | 3.7% | 4.2% |
| Equity market risk premium | 8.3% | 9.3% |
| Adjusted beta | 1.26 | 1.96 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 14.1% | 22.9% |
| Tax rate | 25.3% | 25.7% |
| Debt/Equity ratio | 2.59 | 2.59 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.6% | 9.1% |
| Selected WACC | 7.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| MB.MI | Mediobanca Banca di Credito Finanziario SpA | 2.59 | 1.32 | 0.45 |
| BAMI.MI | Banco BPM SpA | 2 | 1.22 | 0.49 |
| BIRG.IR | Bank of Ireland Group PLC | 1.06 | 1.31 | 0.73 |
| BKT.MC | Bankinter SA | 3.64 | 1.07 | 0.29 |
| ING.WA | ING Bank Slaski SA | 0.07 | 1.04 | 0.99 |
| JYSK.CO | Jyske Bank A/S | 11.79 | 0.33 | 0.03 |
| OTP.BD | OTP Bank Nyrt | 0.42 | 1.49 | 1.13 |
| PKO.WA | Powszechna Kasa Oszczednosci Bank Polski SA | 0.3 | 1.46 | 1.19 |
| SPL.WA | Santander Bank Polska SA | 0.28 | 1.18 | 0.98 |
| TCS.L | TCS Group Holding PLC | 0.17 | -0.42 | -0.38 |
| Low | High | |
| Unlevered beta | 0.47 | 0.83 |
| Relevered beta | 1.39 | 2.43 |
| Adjusted relevered beta | 1.26 | 1.96 |
MB.MI'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 MB.MI:
cost_of_equity (18.50%) = risk_free_rate (3.95%) + equity_risk_premium (8.80%) * adjusted_beta (1.26) + 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.