ROS.MI WACC - Weighted Average Cost of Capital

The WACC of Rosss SpA (ROS.MI) is 8.5%.

The Cost of Equity of Rosss SpA (ROS.MI) is 15.30%.

The Cost of Debt of Rosss SpA (ROS.MI) is 5.50%.

	Range	Selected
Cost of equity	11.10% - 19.50%	15.30%
Tax rate	19.90% - 25.40%	22.65%
Cost of debt	4.00% - 7.00%	5.50%
WACC	6.2% - 10.7%	8.5%

WACC

ROS.MI WACC calculation

Category	Low	High

Long-term bond rate	3.7%	4.2%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.9	1.59

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.10%	19.50%

Tax rate	19.90%	25.40%
Debt/Equity ratio	1.61	1.61
Cost of debt	4.00%	7.00%

After-tax WACC	6.2%	10.7%


Selected WACC	8.5%

ROS.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 ROS.MI:

cost_of_equity (15.30%) = risk_free_rate (3.95%) + equity_risk_premium (8.80%) * adjusted_beta (0.9) + 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.