SEM.LS WACC - Weighted Average Cost of Capital

The WACC of Semapa Sociedade de Investimento e Gestao SGPS SA (SEM.LS) is 8.4%.

The Cost of Equity of Semapa Sociedade de Investimento e Gestao SGPS SA (SEM.LS) is 13.40%.

The Cost of Debt of Semapa Sociedade de Investimento e Gestao SGPS SA (SEM.LS) is 5.00%.

	Range	Selected
Cost of equity	10.00% - 16.80%	13.40%
Tax rate	12.70% - 16.20%	14.45%
Cost of debt	5.00% - 5.00%	5.00%
WACC	6.9% - 9.9%	8.4%

WACC

SEM.LS WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.9%	7.8%
Adjusted beta	1.04	1.64

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.00%	16.80%

Tax rate	12.70%	16.20%
Debt/Equity ratio	1.2	1.2
Cost of debt	5.00%	5.00%

After-tax WACC	6.9%	9.9%


Selected WACC	8.4%

SEM.LS'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 SEM.LS:

cost_of_equity (13.40%) = risk_free_rate (3.15%) + equity_risk_premium (7.35%) * adjusted_beta (1.04) + 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.