SAB.MC
Banco de Sabadell SA
Price:  
2.70 
EUR
Volume:  
13,822,684.00
Spain | Banks
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SAB.MC WACC - Weighted Average Cost of Capital

The WACC of Banco de Sabadell SA (SAB.MC) is 6.4%.

The Cost of Equity of Banco de Sabadell SA (SAB.MC) is 12.90%.
The Cost of Debt of Banco de Sabadell SA (SAB.MC) is 5.00%.

Range Selected
Cost of equity 11.30% - 14.50% 12.90%
Tax rate 28.50% - 29.40% 28.95%
Cost of debt 5.00% - 5.00% 5.00%
WACC 5.9% - 6.9% 6.4%
WACC

SAB.MC WACC calculation

Category Low High
Long-term bond rate 3.1% 3.6%
Equity market risk premium 7.4% 8.4%
Adjusted beta 1.1 1.24
Additional risk adjustments 0.0% 0.5%
Cost of equity 11.30% 14.50%
Tax rate 28.50% 29.40%
Debt/Equity ratio 2.27 2.27
Cost of debt 5.00% 5.00%
After-tax WACC 5.9% 6.9%
Selected WACC 6.4%

SAB.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 SAB.MC:

cost_of_equity (12.90%) = risk_free_rate (3.35%) + equity_risk_premium (7.90%) * adjusted_beta (1.1) + 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.