The WACC of Porr AG (POS.VI) is 8.4%.
Range | Selected | |
Cost of equity | 6.1% - 9.1% | 7.6% |
Tax rate | 24.9% - 25.9% | 25.4% |
Cost of debt | 11.3% - 15.7% | 13.5% |
WACC | 6.9% - 10.0% | 8.4% |
Category | Low | High |
Long-term bond rate | 2.8% | 3.3% |
Equity market risk premium | 5.7% | 6.7% |
Adjusted beta | 0.59 | 0.8 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 6.1% | 9.1% |
Tax rate | 24.9% | 25.9% |
Debt/Equity ratio | 0.5 | 0.5 |
Cost of debt | 11.3% | 15.7% |
After-tax WACC | 6.9% | 10.0% |
Selected WACC | 8.4% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
POS.VI | Porr AG | 0.5 | 0.69 | 0.5 |
CFEB.BR | Aannemingsmaatschappij CFE NV | 0.86 | 0.12 | 0.08 |
GEKTERNA.AT | GEK TERNA Holdings Real Estate Construction SA | 2.25 | 0.67 | 0.25 |
KIE.L | Kier Group PLC | 1.84 | 1.38 | 0.58 |
NCC B.ST | NCC AB | 0.28 | 0.77 | 0.64 |
ORANW.AS | Oranjewoud NV | 1.21 | 0.33 | 0.17 |
PAAL B.CO | Per Aarsleff Holding A/S | 0.14 | 0.19 | 0.18 |
PEAB B.ST | Peab AB | 0.72 | 0.81 | 0.53 |
SCYR.MC | Sacyr SA | 3.08 | 0.99 | 0.3 |
WBD.MI | Webuild SpA | 0.76 | 1.18 | 0.75 |
Low | High | |
Unlevered beta | 0.28 | 0.51 |
Relevered beta | 0.39 | 0.7 |
Adjusted relevered beta | 0.59 | 0.8 |
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 POS.VI:
cost_of_equity (7.60%) = risk_free_rate (3.05%) + equity_risk_premium (6.20%) * adjusted_beta (0.59) + 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.