PM.SW WACC - Weighted Average Cost of Capital

The WACC of Phoenix Mecano AG (PM.SW) is 6.3%.

The Cost of Equity of Phoenix Mecano AG (PM.SW) is 7.80%.

The Cost of Debt of Phoenix Mecano AG (PM.SW) is 4.25%.

	Range	Selected
Cost of equity	6.50% - 9.10%	7.80%
Tax rate	29.20% - 32.80%	31.00%
Cost of debt	4.00% - 4.50%	4.25%
WACC	5.4% - 7.2%	6.3%

WACC

PM.SW WACC calculation

Category	Low	High

Long-term bond rate	1.4%	1.9%
Equity market risk premium	5.5%	6.5%
Adjusted beta	0.92	1.03

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.50%	9.10%

Tax rate	29.20%	32.80%
Debt/Equity ratio	0.45	0.45
Cost of debt	4.00%	4.50%

After-tax WACC	5.4%	7.2%


Selected WACC	6.3%

PM.SW'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 PM.SW:

cost_of_equity (7.80%) = risk_free_rate (1.65%) + equity_risk_premium (6.00%) * adjusted_beta (0.92) + 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.