MTX.DE WACC - Weighted Average Cost of Capital
The WACC of MTU Aero Engines AG (MTX.DE) is 7.7%.
| Range | Selected | |
| Cost of equity | 7.3% - 9.5% | 8.4% |
| Tax rate | 27.5% - 28.2% | 27.85% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 6.7% - 8.7% | 7.7% |
| Category | Low | High |
| Long-term bond rate | 2.8% | 3.3% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.88 | 0.94 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.3% | 9.5% |
| Tax rate | 27.5% | 28.2% |
| Debt/Equity ratio | 0.15 | 0.15 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 6.7% | 8.7% |
| Selected WACC | 7.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| MTX.DE | MTU Aero Engines AG | 0.15 | 1.02 | 0.92 |
| AM.PA | Dassault Aviation SA | 0.01 | 0.79 | 0.79 |
| ASELS.IS | Aselsan Elektronik Sanayi ve Ticaret AS | 0.11 | 0.77 | 0.71 |
| FII.PA | Lisi SA | 0.45 | 1.17 | 0.88 |
| HAG.DE | Hensoldt AG | 0.13 | 1.13 | 1.03 |
| KOG.OL | Kongsberg Gruppen ASA | 0.01 | 1.23 | 1.21 |
| OHB.DE | OHB SE | 0.13 | 0.56 | 0.51 |
| QQ.L | Qinetiq Group PLC | 0.15 | 0.47 | 0.42 |
| SAAB B.ST | Saab AB | 0.04 | 0.78 | 0.76 |
| ULE.L | Ultra Electronics Holdings PLC | 0.07 | 0.51 | 0.48 |
| Low | High | |
| Unlevered beta | 0.74 | 0.83 |
| Relevered beta | 0.82 | 0.91 |
| Adjusted relevered beta | 0.88 | 0.94 |
MTX.DE'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 MTX.DE:
cost_of_equity (8.40%) = risk_free_rate (3.05%) + equity_risk_premium (5.60%) * adjusted_beta (0.88) + 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.