MC.PA
LVMH Moet Hennessy Louis Vuitton SE
Price:  
449.30 
EUR
Volume:  
536,063.00
France | Textiles, Apparel & Luxury Goods
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MC.PA WACC - Weighted Average Cost of Capital

The WACC of LVMH Moet Hennessy Louis Vuitton SE (MC.PA) is 9.4%.

The Cost of Equity of LVMH Moet Hennessy Louis Vuitton SE (MC.PA) is 10.55%.
The Cost of Debt of LVMH Moet Hennessy Louis Vuitton SE (MC.PA) is 4.25%.

Range Selected
Cost of equity 9.20% - 11.90% 10.55%
Tax rate 26.50% - 27.40% 26.95%
Cost of debt 4.00% - 4.50% 4.25%
WACC 8.3% - 10.6% 9.4%
WACC

MC.PA WACC calculation

Category Low High
Long-term bond rate 3.0% 3.5%
Equity market risk premium 5.8% 6.8%
Adjusted beta 1.07 1.16
Additional risk adjustments 0.0% 0.5%
Cost of equity 9.20% 11.90%
Tax rate 26.50% 27.40%
Debt/Equity ratio 0.18 0.18
Cost of debt 4.00% 4.50%
After-tax WACC 8.3% 10.6%
Selected WACC 9.4%

MC.PA'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 MC.PA:

cost_of_equity (10.55%) = risk_free_rate (3.25%) + equity_risk_premium (6.30%) * adjusted_beta (1.07) + 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.