RM.MI WACC - Weighted Average Cost of Capital

The WACC of Reno De Medici SpA (RM.MI) is 9.6%.

The Cost of Equity of Reno De Medici SpA (RM.MI) is 10.50%.

The Cost of Debt of Reno De Medici SpA (RM.MI) is 4.50%.

	Range	Selected
Cost of equity	9.20% - 11.80%	10.50%
Tax rate	30.70% - 34.00%	32.35%
Cost of debt	4.50% - 4.50%	4.50%
WACC	8.5% - 10.8%	9.6%

WACC

RM.MI WACC calculation

Category	Low	High

Long-term bond rate	3.8%	4.3%
Equity market risk premium	6.9%	7.9%
Adjusted beta	0.77	0.88

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.20%	11.80%

Tax rate	30.70%	34.00%
Debt/Equity ratio	0.13	0.13
Cost of debt	4.50%	4.50%

After-tax WACC	8.5%	10.8%


Selected WACC	9.6%

RM.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 RM.MI:

cost_of_equity (10.50%) = risk_free_rate (4.05%) + equity_risk_premium (7.40%) * adjusted_beta (0.77) + 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.