SES.MI WACC - Weighted Average Cost of Capital

The WACC of Sesa SpA (SES.MI) is 9.0%.

The Cost of Equity of Sesa SpA (SES.MI) is 10.85%.

The Cost of Debt of Sesa SpA (SES.MI) is 4.75%.

	Range	Selected
Cost of equity	9.00% - 12.70%	10.85%
Tax rate	29.70% - 29.80%	29.75%
Cost of debt	4.40% - 5.10%	4.75%
WACC	7.5% - 10.4%	9.0%

WACC

SES.MI WACC calculation

Category	Low	High

Long-term bond rate	3.7%	4.2%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.64	0.86

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.00%	12.70%

Tax rate	29.70%	29.80%
Debt/Equity ratio	0.33	0.33
Cost of debt	4.40%	5.10%

After-tax WACC	7.5%	10.4%


Selected WACC	9.0%

SES.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 SES.MI:

cost_of_equity (10.85%) = risk_free_rate (3.95%) + equity_risk_premium (8.80%) * adjusted_beta (0.64) + 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.