SAB.MI WACC - Weighted Average Cost of Capital
The WACC of Sabaf SpA (SAB.MI) is 10.1%.
| Range | Selected | |
| Cost of equity | 12.0% - 15.2% | 13.6% |
| Tax rate | 21.7% - 30.3% | 26% |
| Cost of debt | 4.0% - 4.6% | 4.3% |
| WACC | 9.1% - 11.2% | 10.1% |
| Category | Low | High |
| Long-term bond rate | 3.7% | 4.2% |
| Equity market risk premium | 8.3% | 9.3% |
| Adjusted beta | 1.01 | 1.13 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 12.0% | 15.2% |
| Tax rate | 21.7% | 30.3% |
| Debt/Equity ratio | 0.5 | 0.5 |
| Cost of debt | 4.0% | 4.6% |
| After-tax WACC | 9.1% | 11.2% |
| Selected WACC | 10.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| SAB.MI | Sabaf SpA | 0.5 | 0.47 | 0.34 |
| ALMGI.PA | Mg International SA | 0.18 | 0.65 | 0.58 |
| DLG.MI | De' Longhi SpA | 0.21 | 1.04 | 0.9 |
| HUSQ B.ST | Husqvarna AB | 0.52 | 1.17 | 0.85 |
| IHEVA.IS | Ihlas Ev Aletleri Imalat Sanayi ve Ticaret AS | 0.03 | 0.7 | 0.68 |
| INDB.MI | Indel B SpA | 0.24 | 0.31 | 0.26 |
| SILVR.IS | Silverline Endustri ve Ticaret AS | 0.14 | 1.93 | 1.75 |
| SK.PA | SEB SA | 0.64 | 1.42 | 0.96 |
| TOA.WA | Toya SA | 0.1 | 0.83 | 0.77 |
| YATAS.IS | Yatas Yatak ve Yorgan Sanayi Ticaret AS | 0.22 | 1.44 | 1.24 |
| Low | High | |
| Unlevered beta | 0.73 | 0.87 |
| Relevered beta | 1.01 | 1.19 |
| Adjusted relevered beta | 1.01 | 1.13 |
SAB.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 SAB.MI:
cost_of_equity (13.60%) = risk_free_rate (3.95%) + equity_risk_premium (8.80%) * adjusted_beta (1.01) + 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.