PARRO.PA
Parrot SA
Price:  
7.24 
EUR
Volume:  
32,553.00
France | Communications Equipment
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PARRO.PA WACC - Weighted Average Cost of Capital

The WACC of Parrot SA (PARRO.PA) is 6.1%.

The Cost of Equity of Parrot SA (PARRO.PA) is 6.10%.
The Cost of Debt of Parrot SA (PARRO.PA) is 5.00%.

Range Selected
Cost of equity 5.20% - 7.00% 6.10%
Tax rate 1.30% - 2.00% 1.65%
Cost of debt 5.00% - 5.00% 5.00%
WACC 5.2% - 6.9% 6.1%
WACC

PARRO.PA WACC calculation

Category Low High
Long-term bond rate 3.0% 3.5%
Equity market risk premium 5.8% 6.8%
Adjusted beta 0.38 0.44
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.20% 7.00%
Tax rate 1.30% 2.00%
Debt/Equity ratio 0.04 0.04
Cost of debt 5.00% 5.00%
After-tax WACC 5.2% 6.9%
Selected WACC 6.1%

PARRO.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 PARRO.PA:

cost_of_equity (6.10%) = risk_free_rate (3.25%) + equity_risk_premium (6.30%) * adjusted_beta (0.38) + 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.