REY.MI WACC - Weighted Average Cost of Capital
The WACC of Reply SpA (REY.MI) is 10.5%.
| Range | Selected | |
| Cost of equity | 9.2% - 12.2% | 10.7% |
| Tax rate | 28.5% - 29.4% | 28.95% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 9.0% - 11.9% | 10.5% |
| Category | Low | High |
| Long-term bond rate | 3.7% | 4.2% |
| Equity market risk premium | 8.3% | 9.3% |
| Adjusted beta | 0.67 | 0.81 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.2% | 12.2% |
| Tax rate | 28.5% | 29.4% |
| Debt/Equity ratio | 0.04 | 0.04 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 9.0% | 11.9% |
| Selected WACC | 10.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| REY.MI | Reply SpA | 0.04 | 0.78 | 0.76 |
| COK.DE | Cancom SE | 0.18 | 0.79 | 0.7 |
| DOM.MC | Global Dominion Access SA | 0.96 | 0.75 | 0.44 |
| DVT.PA | Devoteam SA | 0.06 | 0.74 | 0.71 |
| EWRK.ST | Ework Group AB | 0.12 | 0.25 | 0.23 |
| KNOS.L | Kainos Group PLC | 0.01 | 1.88 | 1.88 |
| NA9.DE | Nagarro SE | 0.48 | 0.7 | 0.52 |
| NRO.PA | Neurones SA | 0.04 | 0.43 | 0.42 |
| SANT.DE | S&T AG | 0.42 | 1.1 | 0.85 |
| SII.PA | Societe Pour l Informatique Industrielle SA | 0.07 | 0.39 | 0.38 |
| Low | High | |
| Unlevered beta | 0.49 | 0.7 |
| Relevered beta | 0.51 | 0.72 |
| Adjusted relevered beta | 0.67 | 0.81 |
REY.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 REY.MI:
cost_of_equity (10.70%) = risk_free_rate (3.95%) + equity_risk_premium (8.80%) * adjusted_beta (0.67) + 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.