SGRE.MC WACC - Weighted Average Cost of Capital

The WACC of Siemens Gamesa Renewable Energy SA (SGRE.MC) is 9.2%.

The Cost of Equity of Siemens Gamesa Renewable Energy SA (SGRE.MC) is 10.15%.

The Cost of Debt of Siemens Gamesa Renewable Energy SA (SGRE.MC) is 5.50%.

	Range	Selected
Cost of equity	8.30% - 12.00%	10.15%
Tax rate	11.80% - 18.30%	15.05%
Cost of debt	4.00% - 7.00%	5.50%
WACC	7.5% - 10.9%	9.2%

WACC

SGRE.MC WACC calculation

Category	Low	High

Long-term bond rate	3.1%	3.6%
Equity market risk premium	7.4%	8.4%
Adjusted beta	0.71	0.93

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.30%	12.00%

Tax rate	11.80%	18.30%
Debt/Equity ratio	0.2	0.2
Cost of debt	4.00%	7.00%

After-tax WACC	7.5%	10.9%


Selected WACC	9.2%

SGRE.MC'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 SGRE.MC:

cost_of_equity (10.15%) = risk_free_rate (3.35%) + equity_risk_premium (7.90%) * adjusted_beta (0.71) + 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.