The WACC of SES SA (SESG.PA) is 4.8%.
Range | Selected | |
Cost of equity | 6.1% - 7.8% | 6.95% |
Tax rate | 19.4% - 41.3% | 30.35% |
Cost of debt | 4.0% - 6.6% | 5.3% |
WACC | 4.3% - 5.4% | 4.8% |
Category | Low | High |
Long-term bond rate | 3.0% | 3.5% |
Equity market risk premium | 5.8% | 6.8% |
Adjusted beta | 0.53 | 0.56 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 6.1% | 7.8% |
Tax rate | 19.4% | 41.3% |
Debt/Equity ratio | 1.63 | 1.63 |
Cost of debt | 4.0% | 6.6% |
After-tax WACC | 4.3% | 5.4% |
Selected WACC | 4.8% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
SESG.PA | SES SA | 1.63 | 0.29 | 0.13 |
CPS.WA | Cyfrowy Polsat SA | 1.41 | 0.3 | 0.14 |
ETL.PA | Eutelsat Communications SA | 1.98 | 0.34 | 0.13 |
HLEE.SW | Highlight Event and Entertainment AG | 4.38 | 0.81 | 0.19 |
SCHA.OL | Schibsted ASA | 0.05 | 0.18 | 0.17 |
TC1.DE | Tele Columbus AG | 1.78 | 1.08 | 0.46 |
TNET.BR | Telenet Group Holding NV | 2.88 | 0.65 | 0.2 |
CCA.TO | Cogeco Communications Inc | 1.74 | 0.29 | 0.12 |
CGO.TO | Cogeco Inc | 7.46 | 0.42 | 0.06 |
QBR.B.TO | Quebecor Inc | 0.87 | -0.23 | -0.14 |
Low | High | |
Unlevered beta | 0.13 | 0.16 |
Relevered beta | 0.3 | 0.34 |
Adjusted relevered beta | 0.53 | 0.56 |
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 SESG.PA:
cost_of_equity (6.95%) = risk_free_rate (3.25%) + equity_risk_premium (6.30%) * adjusted_beta (0.53) + 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.