VIH1.DE
VIB Vermoegen AG
Price:  
7.2 
EUR
Volume:  
3,553
Germany | Real Estate Management & Development

VIH1.DE WACC - Weighted Average Cost of Capital

The WACC of VIB Vermoegen AG (VIH1.DE) is 6.3%.

The Cost of Equity of VIB Vermoegen AG (VIH1.DE) is 5.85%.
The Cost of Debt of VIB Vermoegen AG (VIH1.DE) is 7.65%.

RangeSelected
Cost of equity4.7% - 7.0%5.85%
Tax rate15.1% - 16.2%15.65%
Cost of debt4.0% - 11.3%7.65%
WACC3.7% - 8.9%6.3%
WACC

VIH1.DE WACC calculation

CategoryLowHigh
Long-term bond rate2.8%3.3%
Equity market risk premium5.1%6.1%
Adjusted beta0.370.52
Additional risk adjustments0.0%0.5%
Cost of equity4.7%7.0%
Tax rate15.1%16.2%
Debt/Equity ratio
3.543.54
Cost of debt4.0%11.3%
After-tax WACC3.7%8.9%
Selected WACC6.3%

VIH1.DE'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 VIH1.DE:

cost_of_equity (5.85%) = risk_free_rate (3.05%) + equity_risk_premium (5.60%) * 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.