The WACC of Tiscali SpA (TIS.MI) is 8.3%.
Range | Selected | |
Cost of equity | 8.9% - 13.0% | 10.95% |
Tax rate | 0.3% - 0.5% | 0.4% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 7.2% - 9.5% | 8.3% |
Category | Low | High |
Long-term bond rate | 4.3% | 4.8% |
Equity market risk premium | 8.8% | 9.8% |
Adjusted beta | 0.53 | 0.78 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 8.9% | 13.0% |
Tax rate | 0.3% | 0.5% |
Debt/Equity ratio | 0.79 | 0.79 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 7.2% | 9.5% |
Selected WACC | 8.3% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
TIS.MI | Tiscali SpA | 0.79 | 1.15 | 0.64 |
BBB.L | Bigblu Broadband PLC | 0.65 | -1.08 | -0.65 |
BRE2.ST | Bredband2 i Skandinavien AB | 0.12 | 0.19 | 0.17 |
GO.MI | GO internet SpA | 2.15 | -0.13 | -0.04 |
ILD.PA | Iliad SA | 1.11 | 0.21 | 0.1 |
LIT.MI | Reti Telematiche Italiane SpA | 0.37 | 0.72 | 0.53 |
NFN.DE | NFON AG | 0.13 | 0.11 | 0.09 |
TRANS.ST | Transtema Group AB | 0.66 | 0.65 | 0.39 |
TGO.TO | Terago Inc | 1.77 | 0.46 | 0.17 |
Low | High | |
Unlevered beta | 0.11 | 0.17 |
Relevered beta | 0.3 | 0.67 |
Adjusted relevered beta | 0.53 | 0.78 |
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 TIS.MI:
cost_of_equity (10.95%) = risk_free_rate (4.55%) + equity_risk_premium (9.30%) * adjusted_beta (0.53) + 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.