The WACC of Trastor Real Estate Investment Company SA (TRASTOR.AT) is 8.1%.
| Range | Selected | |
| Cost of equity | 6.50% - 8.30% | 7.40% |
| Tax rate | 3.20% - 5.90% | 4.55% |
| Cost of debt | 4.20% - 15.10% | 9.65% |
| WACC | 5.5% - 10.8% | 8.1% |
| Category | Low | High |
| Long-term bond rate | 3.3% | 3.8% |
| Equity market risk premium | 8.8% | 9.8% |
| Adjusted beta | 0.37 | 0.4 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.50% | 8.30% |
| Tax rate | 3.20% | 5.90% |
| Debt/Equity ratio | 0.74 | 0.74 |
| Cost of debt | 4.20% | 15.10% |
| After-tax WACC | 5.5% | 10.8% |
| Selected WACC | 8.1% | |
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 TRASTOR.AT:
cost_of_equity (7.40%) = risk_free_rate (3.55%) + equity_risk_premium (9.30%) * adjusted_beta (0.37) + 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.