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.