The WACC of Netia SA (NET.WA) is 10.6%.
Range | Selected | |
Cost of equity | 11.1% - 13.3% | 12.2% |
Tax rate | 25.1% - 36.4% | 30.75% |
Cost of debt | 4.0% - 10.0% | 7% |
WACC | 9.4% - 11.8% | 10.6% |
Category | Low | High |
Long-term bond rate | 7.2% | 7.7% |
Equity market risk premium | 5.6% | 6.6% |
Adjusted beta | 0.69 | 0.77 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 11.1% | 13.3% |
Tax rate | 25.1% | 36.4% |
Debt/Equity ratio | 0.27 | 0.27 |
Cost of debt | 4.0% | 10.0% |
After-tax WACC | 9.4% | 11.8% |
Selected WACC | 10.6% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
NET.WA | Netia SA | 0.27 | 0.2 | 0.17 |
ADT.L | Adept Technology Group PLC | 0.81 | 1.5 | 0.96 |
E4C.DE | Ecotel Communication AG | 0.15 | 0.33 | 0.29 |
LLN.MC | Lleidanetworks Serveis Telematics SA | 0.38 | 0.56 | 0.44 |
NEWS.AT | Newsphone Hellas SA | 0.17 | 0.48 | 0.43 |
R22.WA | R22 SA | 0.33 | 0.43 | 0.35 |
TEL1L.VS | Telia Lietuva AB | 0.12 | 0.49 | 0.46 |
TLS.WA | Telestrada SA | 1.13 | 0.21 | 0.12 |
U2K.WA | Unima 2000 Systemy Teleinformatyczne SA | 0.13 | 0.18 | 0.17 |
ZEG.L | Zegona Communications PLC | 0.72 | 1.63 | 1.09 |
Low | High | |
Unlevered beta | 0.33 | 0.44 |
Relevered beta | 0.54 | 0.66 |
Adjusted relevered beta | 0.69 | 0.77 |
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 NET.WA:
cost_of_equity (12.20%) = risk_free_rate (7.45%) + equity_risk_premium (6.10%) * adjusted_beta (0.69) + 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.