REP.MC WACC - Weighted Average Cost of Capital
The WACC of Repsol SA (REP.MC) is 8.0%.
| Range | Selected | |
| Cost of equity | 10.3% - 14.2% | 12.25% |
| Tax rate | 25.4% - 31.3% | 28.35% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 6.9% - 9.2% | 8.0% |
| Category | Low | High |
| Long-term bond rate | 3.1% | 3.6% |
| Equity market risk premium | 7.4% | 8.4% |
| Adjusted beta | 0.96 | 1.2 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 10.3% | 14.2% |
| Tax rate | 25.4% | 31.3% |
| Debt/Equity ratio | 0.84 | 0.84 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 6.9% | 9.2% |
| Selected WACC | 8.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| REP.MC | Repsol SA | 0.84 | 0.73 | 0.45 |
| BP.L | BP PLC | 0.85 | 1.35 | 0.83 |
| ENI.MI | Eni SpA | 0.85 | 0.61 | 0.37 |
| FP.PA | Total SE | 0.71 | 1.15 | 0.75 |
| GALP.LS | Galp Energia SGPS SA | 0.45 | 0.67 | 0.5 |
| MOL.BD | MOL Magyar Olajes Gazipari Nyrt | 0.67 | 0.45 | 0.3 |
| OMV.VI | OMV AG | 0.63 | 1.34 | 0.91 |
| PKN.WA | Polski Koncern Naftowy Orlen SA | 0.31 | 0.78 | 0.64 |
| RDSA.AS | Royal Dutch Shell PLC | 0.58 | 1.15 | 0.81 |
| SU.TO | Suncor Energy Inc | 0.23 | 1.28 | 1.09 |
| Low | High | |
| Unlevered beta | 0.58 | 0.77 |
| Relevered beta | 0.94 | 1.3 |
| Adjusted relevered beta | 0.96 | 1.2 |
REP.MC'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 REP.MC:
cost_of_equity (12.25%) = risk_free_rate (3.35%) + equity_risk_premium (7.90%) * adjusted_beta (0.96) + 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.