RE.PA WACC - Weighted Average Cost of Capital

The WACC of Colas SA (RE.PA) is 8.5%.

The Cost of Equity of Colas SA (RE.PA) is 8.70%.

The Cost of Debt of Colas SA (RE.PA) is 12.45%.

	Range	Selected
Cost of equity	7.50% - 9.90%	8.70%
Tax rate	37.30% - 38.50%	37.90%
Cost of debt	11.50% - 13.40%	12.45%
WACC	7.5% - 9.6%	8.5%

WACC

RE.PA WACC calculation

Category	Low	High

Long-term bond rate	3.0%	3.5%
Equity market risk premium	5.8%	6.8%
Adjusted beta	0.78	0.86

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.50%	9.90%

Tax rate	37.30%	38.50%
Debt/Equity ratio	0.25	0.25
Cost of debt	11.50%	13.40%

After-tax WACC	7.5%	9.6%


Selected WACC	8.5%

RE.PA'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 RE.PA:

cost_of_equity (8.70%) = risk_free_rate (3.25%) + equity_risk_premium (6.30%) * adjusted_beta (0.78) + 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.