PROFK.AT WACC - Weighted Average Cost of Capital

The WACC of Pipe Works L Girakian Profil SA (PROFK.AT) is 7.4%.

The Cost of Equity of Pipe Works L Girakian Profil SA (PROFK.AT) is 18.25%.

The Cost of Debt of Pipe Works L Girakian Profil SA (PROFK.AT) is 6.70%.

	Range	Selected
Cost of equity	14.20% - 22.30%	18.25%
Tax rate	19.80% - 32.30%	26.05%
Cost of debt	6.40% - 7.00%	6.70%
WACC	6.8% - 8.0%	7.4%

WACC

PROFK.AT WACC calculation

Category	Low	High

Long-term bond rate	3.3%	3.8%
Equity market risk premium	8.8%	9.8%
Adjusted beta	1.24	1.85

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.20%	22.30%

Tax rate	19.80%	32.30%
Debt/Equity ratio	4.33	4.33
Cost of debt	6.40%	7.00%

After-tax WACC	6.8%	8.0%


Selected WACC	7.4%

PROFK.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 PROFK.AT:

cost_of_equity (18.25%) = risk_free_rate (3.55%) + equity_risk_premium (9.30%) * adjusted_beta (1.24) + 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.