MDM.PA WACC - Weighted Average Cost of Capital

The WACC of Maisons du Monde SA (MDM.PA) is 3.8%.

The Cost of Equity of Maisons du Monde SA (MDM.PA) is 11.50%.

The Cost of Debt of Maisons du Monde SA (MDM.PA) is 4.25%.

	Range	Selected
Cost of equity	9.40% - 13.60%	11.50%
Tax rate	32.10% - 36.00%	34.05%
Cost of debt	4.00% - 4.50%	4.25%
WACC	3.5% - 4.1%	3.8%

WACC

MDM.PA WACC calculation

Category	Low	High

Long-term bond rate	3.0%	3.5%
Equity market risk premium	5.8%	6.8%
Adjusted beta	1.1	1.41

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.40%	13.60%

Tax rate	32.10%	36.00%
Debt/Equity ratio	7.61	7.61
Cost of debt	4.00%	4.50%

After-tax WACC	3.5%	4.1%


Selected WACC	3.8%

MDM.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 MDM.PA:

cost_of_equity (11.50%) = risk_free_rate (3.25%) + equity_risk_premium (6.30%) * adjusted_beta (1.1) + 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.