PIA.MI WACC - Weighted Average Cost of Capital

The WACC of Piaggio & C SpA (PIA.MI) is 8.8%.

The Cost of Equity of Piaggio & C SpA (PIA.MI) is 14.55%.

The Cost of Debt of Piaggio & C SpA (PIA.MI) is 6.30%.

	Range	Selected
Cost of equity	10.30% - 18.80%	14.55%
Tax rate	33.10% - 33.60%	33.35%
Cost of debt	5.30% - 7.30%	6.30%
WACC	6.6% - 11.1%	8.8%

WACC

PIA.MI WACC calculation

Category	Low	High

Long-term bond rate	3.7%	4.2%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.8	1.52

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.30%	18.80%

Tax rate	33.10%	33.60%
Debt/Equity ratio	1.23	1.23
Cost of debt	5.30%	7.30%

After-tax WACC	6.6%	11.1%


Selected WACC	8.8%

PIA.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 PIA.MI:

cost_of_equity (14.55%) = risk_free_rate (3.95%) + equity_risk_premium (8.80%) * adjusted_beta (0.8) + 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.