The WACC of Piraeus Financial Holdings SA (TPEIR.AT) is 9.9%.
| Range | Selected | |
| Cost of equity | 11.20% - 14.80% | 13.00% |
| Tax rate | 19.20% - 24.10% | 21.65% |
| Cost of debt | 5.00% - 5.00% | 5.00% |
| WACC | 8.8% - 11.0% | 9.9% |
| Category | Low | High |
| Long-term bond rate | 3.3% | 3.8% |
| Equity market risk premium | 8.8% | 9.8% |
| Adjusted beta | 0.9 | 1.07 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 11.20% | 14.80% |
| Tax rate | 19.20% | 24.10% |
| Debt/Equity ratio | 0.52 | 0.52 |
| Cost of debt | 5.00% | 5.00% |
| After-tax WACC | 8.8% | 11.0% |
| Selected WACC | 9.9% | |
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 (13.00%) = risk_free_rate (3.55%) + equity_risk_premium (9.30%) * adjusted_beta (0.9) + 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.