ROVI.MC
Laboratorios Farmaceuticos ROVI SA
Price:  
55.65 
EUR
Volume:  
214,329
Spain | Pharmaceuticals

ROVI.MC WACC - Weighted Average Cost of Capital

The WACC of Laboratorios Farmaceuticos ROVI SA (ROVI.MC) is 8.4%.

The Cost of Equity of Laboratorios Farmaceuticos ROVI SA (ROVI.MC) is 8.6%.
The Cost of Debt of Laboratorios Farmaceuticos ROVI SA (ROVI.MC) is 4.25%.

RangeSelected
Cost of equity7.4% - 9.8%8.6%
Tax rate20.0% - 22.7%21.35%
Cost of debt4.0% - 4.5%4.25%
WACC7.2% - 9.6%8.4%
WACC

ROVI.MC WACC calculation

CategoryLowHigh
Long-term bond rate3.1%3.6%
Equity market risk premium7.4%8.4%
Adjusted beta0.580.68
Additional risk adjustments0.0%0.5%
Cost of equity7.4%9.8%
Tax rate20.0%22.7%
Debt/Equity ratio
0.040.04
Cost of debt4.0%4.5%
After-tax WACC7.2%9.6%
Selected WACC8.4%

ROVI.MC'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 ROVI.MC:

cost_of_equity (8.60%) = risk_free_rate (3.35%) + equity_risk_premium (7.90%) * adjusted_beta (0.58) + 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.