The WACC of Zur Rose Group AG (ROSE.SW) is 7.1%.
| Range | Selected | |
| Cost of equity | 6.40% - 10.30% | 8.35% |
| Tax rate | 0.70% - 1.00% | 0.85% |
| Cost of debt | 4.00% - 7.00% | 5.50% |
| WACC | 5.4% - 8.9% | 7.1% |
| Category | Low | High |
| Long-term bond rate | 1.4% | 1.9% |
| Equity market risk premium | 5.5% | 6.5% |
| Adjusted beta | 0.9 | 1.21 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.40% | 10.30% |
| Tax rate | 0.70% | 1.00% |
| Debt/Equity ratio | 0.74 | 0.74 |
| Cost of debt | 4.00% | 7.00% |
| After-tax WACC | 5.4% | 8.9% |
| Selected WACC | 7.1% | |
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 ROSE.SW:
cost_of_equity (8.35%) = risk_free_rate (1.65%) + equity_risk_premium (6.00%) * 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.