MON.MI WACC - Weighted Average Cost of Capital

The WACC of Monrif SpA (MON.MI) is 6.0%.

The Cost of Equity of Monrif SpA (MON.MI) is 34.85%.

The Cost of Debt of Monrif SpA (MON.MI) is 4.70%.

	Range	Selected
Cost of equity	24.30% - 45.40%	34.85%
Tax rate	28.50% - 39.70%	34.10%
Cost of debt	4.50% - 4.90%	4.70%
WACC	5.2% - 6.9%	6.0%

WACC

MON.MI WACC calculation

Category	Low	High

Long-term bond rate	3.7%	4.2%
Equity market risk premium	8.3%	9.3%
Adjusted beta	2.48	4.38

Additional risk adjustments	0.0%	0.5%
Cost of equity	24.30%	45.40%

Tax rate	28.50%	39.70%
Debt/Equity ratio	9.78	9.78
Cost of debt	4.50%	4.90%

After-tax WACC	5.2%	6.9%


Selected WACC	6.0%

MON.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 MON.MI:

cost_of_equity (34.85%) = risk_free_rate (3.95%) + equity_risk_premium (8.80%) * adjusted_beta (2.48) + 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.