The WACC of Piraeus Financial Holdings SA (TPEIR.AT) is 9.4%.
| Range | Selected | |
| Cost of equity | 10.90% - 15.00% | 12.95% |
| Tax rate | 19.70% - 24.60% | 22.15% |
| Cost of debt | 5.00% - 5.00% | 5.00% |
| WACC | 8.2% - 10.7% | 9.4% |
| Category | Low | High |
| Long-term bond rate | 3.3% | 3.8% |
| Equity market risk premium | 8.8% | 9.8% |
| Adjusted beta | 0.86 | 1.09 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 10.90% | 15.00% |
| Tax rate | 19.70% | 24.60% |
| Debt/Equity ratio | 0.63 | 0.63 |
| Cost of debt | 5.00% | 5.00% |
| After-tax WACC | 8.2% | 10.7% |
| Selected WACC | 9.4% | |
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 TPEIR.AT:
cost_of_equity (12.95%) = risk_free_rate (3.55%) + equity_risk_premium (9.30%) * adjusted_beta (0.86) + 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.