PTR.MI
Pattern SpA
Price:  
4.80 
EUR
Volume:  
627.00
Italy | Textiles, Apparel & Luxury Goods
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PTR.MI WACC - Weighted Average Cost of Capital

The WACC of Pattern SpA (PTR.MI) is 7.6%.

The Cost of Equity of Pattern SpA (PTR.MI) is 9.10%.
The Cost of Debt of Pattern SpA (PTR.MI) is 5.00%.

Range Selected
Cost of equity 7.80% - 10.40% 9.10%
Tax rate 23.80% - 29.20% 26.50%
Cost of debt 5.00% - 5.00% 5.00%
WACC 6.7% - 8.6% 7.6%
WACC

PTR.MI WACC calculation

Category Low High
Long-term bond rate 3.7% 4.2%
Equity market risk premium 8.3% 9.3%
Adjusted beta 0.5 0.62
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.80% 10.40%
Tax rate 23.80% 29.20%
Debt/Equity ratio 0.37 0.37
Cost of debt 5.00% 5.00%
After-tax WACC 6.7% 8.6%
Selected WACC 7.6%

PTR.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 PTR.MI:

cost_of_equity (9.10%) = risk_free_rate (3.95%) + equity_risk_premium (8.80%) * adjusted_beta (0.5) + 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.