TES.MI WACC - Weighted Average Cost of Capital
The WACC of Tesmec SpA (TES.MI) is 12.4%.
| Range | Selected | |
| Cost of equity | 28.3% - 40.1% | 34.2% |
| Tax rate | 30.7% - 35.6% | 33.15% |
| Cost of debt | 4.4% - 23.7% | 14.05% |
| WACC | 6.4% - 18.5% | 12.4% |
| Category | Low | High |
| Long-term bond rate | 3.7% | 4.2% |
| Equity market risk premium | 8.3% | 9.3% |
| Adjusted beta | 2.97 | 3.81 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 28.3% | 40.1% |
| Tax rate | 30.7% | 35.6% |
| Debt/Equity ratio | 6.63 | 6.63 |
| Cost of debt | 4.4% | 23.7% |
| After-tax WACC | 6.4% | 18.5% |
| Selected WACC | 12.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| TES.MI | Tesmec SpA | 6.63 | 0.49 | 0.09 |
| ASUZU.IS | Anadolu Isuzu Otomotiv Sanayii ve Ticaret AS | 0.23 | 1.56 | 1.35 |
| COIC.ST | Concentric AB | 0.13 | 1.47 | 1.36 |
| HYARD.OL | Havyard Group ASA | 0.89 | 1.08 | 0.67 |
| JANTS.IS | Jantsa Jant Sanayi ve Ticaret AS | 0.01 | 0.85 | 0.85 |
| OTKAR.IS | Otokar Otomotiv ve Savunma Sanayi AS | 0.19 | 1.22 | 1.08 |
| RABA.BD | Raba Jarmuipari Holding Nyrt | 1.08 | 0.5 | 0.29 |
| ROBIT.HE | Robit Plc | 0.99 | 0.67 | 0.4 |
| S4A.DE | SMT Scharf AG | 0.34 | 0.91 | 0.74 |
| TMSN.IS | Tumosan Motor ve Traktor Sanayi AS | 0.17 | 1.33 | 1.2 |
| Low | High | |
| Unlevered beta | 0.71 | 0.94 |
| Relevered beta | 3.94 | 5.19 |
| Adjusted relevered beta | 2.97 | 3.81 |
TES.MI'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 TES.MI:
cost_of_equity (34.20%) = risk_free_rate (3.95%) + equity_risk_premium (8.80%) * adjusted_beta (2.97) + 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.