The WACC of SG Company SpA (SGC.MI) is 7.0%.
Range | Selected | |
Cost of equity | 8.6% - 12.5% | 10.55% |
Tax rate | 21.1% - 30.2% | 25.65% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 6.2% - 7.8% | 7.0% |
Category | Low | High |
Long-term bond rate | 3.7% | 4.2% |
Equity market risk premium | 8.3% | 9.3% |
Adjusted beta | 0.59 | 0.85 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 8.6% | 12.5% |
Tax rate | 21.1% | 30.2% |
Debt/Equity ratio | 1.11 | 1.11 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 6.2% | 7.8% |
Selected WACC | 7.0% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
SGC.MI | SG Company SpA | 1.11 | 0.4 | 0.22 |
ADUX.PA | Adux SA | 0.29 | 0.73 | 0.6 |
ALMAK.PA | Makheia Group SA | 0.05 | 0.73 | 0.7 |
ALMNG.PA | Madvertise SA | 0.26 | 1.52 | 1.28 |
ALPRI.PA | Prismaflex International SA | 1.26 | 0.41 | 0.21 |
AWRD.ST | Awardit AB (publ) | 0.18 | 0.18 | 0.16 |
CBDG.PA | Compagnie du Cambodge SA | 0.01 | 0.2 | 0.2 |
MCP.WA | Mediacap SA | 0.32 | 0.4 | 0.32 |
NAH.L | NAHL Group PLC | 0.41 | 1.01 | 0.77 |
SYS1.L | System1 Group PLC | 0.01 | 0.16 | 0.16 |
Low | High | |
Unlevered beta | 0.22 | 0.43 |
Relevered beta | 0.39 | 0.78 |
Adjusted relevered beta | 0.59 | 0.85 |
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 SGC.MI:
cost_of_equity (10.55%) = risk_free_rate (3.95%) + equity_risk_premium (8.80%) * adjusted_beta (0.59) + 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.