The WACC of Sioen Industries NV (SIOE.BR) is 7.0%.
| Range | Selected | |
| Cost of equity | 6.80% - 9.30% | 8.05% |
| Tax rate | 29.60% - 31.70% | 30.65% |
| Cost of debt | 4.00% - 4.50% | 4.25% |
| WACC | 6.0% - 8.1% | 7.0% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 5.3% | 6.3% |
| Adjusted beta | 0.78 | 0.89 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.80% | 9.30% |
| Tax rate | 29.60% | 31.70% |
| Debt/Equity ratio | 0.26 | 0.26 |
| Cost of debt | 4.00% | 4.50% |
| After-tax WACC | 6.0% | 8.1% |
| Selected WACC | 7.0% | |
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 SIOE.BR:
cost_of_equity (8.05%) = risk_free_rate (2.95%) + equity_risk_premium (5.80%) * adjusted_beta (0.78) + 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.