PRL.MI
Pierrel SpA
Price:  
1.75 
EUR
Volume:  
9,233
Italy | Pharmaceuticals

PRL.MI WACC - Weighted Average Cost of Capital

The WACC of Pierrel SpA (PRL.MI) is 7.0%.

The Cost of Equity of Pierrel SpA (PRL.MI) is 7.7%.
The Cost of Debt of Pierrel SpA (PRL.MI) is 5%.

RangeSelected
Cost of equity6.8% - 8.6%7.7%
Tax rate7.7% - 8.9%8.3%
Cost of debt5.0% - 5.0%5%
WACC6.3% - 7.7%7.0%
WACC

PRL.MI WACC calculation

CategoryLowHigh
Long-term bond rate3.7%4.2%
Equity market risk premium8.3%9.3%
Adjusted beta0.380.42
Additional risk adjustments0.0%0.5%
Cost of equity6.8%8.6%
Tax rate7.7%8.9%
Debt/Equity ratio
0.280.28
Cost of debt5.0%5.0%
After-tax WACC6.3%7.7%
Selected WACC7.0%

PRL.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 PRL.MI:

cost_of_equity (7.70%) = risk_free_rate (3.95%) + equity_risk_premium (8.80%) * 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.