PROF.AT WACC - Weighted Average Cost of Capital

The WACC of Profile Systems and Software SA (PROF.AT) is 12.3%.

The Cost of Equity of Profile Systems and Software SA (PROF.AT) is 12.80%.

The Cost of Debt of Profile Systems and Software SA (PROF.AT) is 6.35%.

	Range	Selected
Cost of equity	10.40% - 15.20%	12.80%
Tax rate	22.10% - 23.80%	22.95%
Cost of debt	4.20% - 8.50%	6.35%
WACC	9.9% - 14.6%	12.3%

WACC

PROF.AT WACC calculation

Category	Low	High

Long-term bond rate	3.3%	3.8%
Equity market risk premium	8.8%	9.8%
Adjusted beta	0.81	1.12

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.40%	15.20%

Tax rate	22.10%	23.80%
Debt/Equity ratio	0.07	0.07
Cost of debt	4.20%	8.50%

After-tax WACC	9.9%	14.6%


Selected WACC	12.3%

PROF.AT'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 PROF.AT:

cost_of_equity (12.80%) = risk_free_rate (3.55%) + equity_risk_premium (9.30%) * adjusted_beta (0.81) + 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.