The WACC of Stellantis NV (STLA.MI) is 11.2%.
| Range | Selected | |
| Cost of equity | 13.10% - 17.10% | 15.10% |
| Tax rate | 14.00% - 22.90% | 18.45% |
| Cost of debt | 4.20% - 5.00% | 4.60% |
| WACC | 9.9% - 12.6% | 11.2% |
| Category | Low | High |
| Long-term bond rate | 4.3% | 4.8% |
| Equity market risk premium | 8.8% | 9.8% |
| Adjusted beta | 1 | 1.21 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 13.10% | 17.10% |
| Tax rate | 14.00% | 22.90% |
| Debt/Equity ratio | 0.52 | 0.52 |
| Cost of debt | 4.20% | 5.00% |
| After-tax WACC | 9.9% | 12.6% |
| Selected WACC | 11.2% | |
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 STLA.MI:
cost_of_equity (15.10%) = risk_free_rate (4.55%) + equity_risk_premium (9.30%) * adjusted_beta (1) + 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.