RI.PA WACC - Weighted Average Cost of Capital
The WACC of Pernod Ricard SA (RI.PA) is 6.4%.
| Range | Selected | |
| Cost of equity | 7.0% - 9.9% | 8.45% |
| Tax rate | 30.1% - 33.5% | 31.8% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 5.5% - 7.4% | 6.4% |
| Category | Low | High |
| Long-term bond rate | 3.0% | 3.5% |
| Equity market risk premium | 5.8% | 6.8% |
| Adjusted beta | 0.68 | 0.86 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.0% | 9.9% |
| Tax rate | 30.1% | 33.5% |
| Debt/Equity ratio | 0.57 | 0.57 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 5.5% | 7.4% |
| Selected WACC | 6.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| RI.PA | Pernod Ricard SA | 0.57 | 0.93 | 0.68 |
| ARCUS.OL | Arcus ASA | 0.62 | 0.45 | 0.31 |
| CCR.L | C&C Group PLC | 0.5 | 1.17 | 0.88 |
| CPR.MI | Davide Campari Milano NV | 0.38 | 0.63 | 0.51 |
| DGE.L | Diageo PLC | 0.52 | 0.58 | 0.43 |
| LPE.PA | Laurent Perrier SA | 0.42 | 0.35 | 0.28 |
| MBWS.PA | Marie Brizard Wine and Spirits SA | 0.02 | -0.05 | -0.05 |
| RCO.PA | Remy Cointreau SA | 0.26 | 1.11 | 0.95 |
| STCK.L | Stock Spirits Group PLC | 0.09 | 0.94 | 0.88 |
| SWA.DE | Schloss Wachenheim AG | 0.82 | 0.04 | 0.02 |
| Low | High | |
| Unlevered beta | 0.38 | 0.57 |
| Relevered beta | 0.52 | 0.79 |
| Adjusted relevered beta | 0.68 | 0.86 |
RI.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 RI.PA:
cost_of_equity (8.45%) = risk_free_rate (3.25%) + equity_risk_premium (6.30%) * adjusted_beta (0.68) + 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.