SOP.PA WACC - Weighted Average Cost of Capital

The WACC of Sopra Steria Group SA (SOP.PA) is 7.8%.

The Cost of Equity of Sopra Steria Group SA (SOP.PA) is 9.90%.

The Cost of Debt of Sopra Steria Group SA (SOP.PA) is 4.25%.

	Range	Selected
Cost of equity	8.00% - 11.80%	9.90%
Tax rate	28.10% - 31.60%	29.85%
Cost of debt	4.00% - 4.50%	4.25%
WACC	6.5% - 9.1%	7.8%

WACC

SOP.PA WACC calculation

Category	Low	High

Long-term bond rate	3.0%	3.5%
Equity market risk premium	5.8%	6.8%
Adjusted beta	0.87	1.15

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.00%	11.80%

Tax rate	28.10%	31.60%
Debt/Equity ratio	0.44	0.44
Cost of debt	4.00%	4.50%

After-tax WACC	6.5%	9.1%


Selected WACC	7.8%

SOP.PA'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 SOP.PA:

cost_of_equity (9.90%) = risk_free_rate (3.25%) + equity_risk_premium (6.30%) * adjusted_beta (0.87) + 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.