VK.PA
Vallourec SA
Price:  
16.78 
EUR
Volume:  
671,295.00
France | Energy Equipment & Services
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VK.PA WACC - Weighted Average Cost of Capital

The WACC of Vallourec SA (VK.PA) is 7.9%.

The Cost of Equity of Vallourec SA (VK.PA) is 9.35%.
The Cost of Debt of Vallourec SA (VK.PA) is 5.00%.

Range Selected
Cost of equity 8.10% - 10.60% 9.35%
Tax rate 29.60% - 39.70% 34.65%
Cost of debt 4.00% - 6.00% 5.00%
WACC 6.9% - 9.0% 7.9%
WACC

VK.PA WACC calculation

Category Low High
Long-term bond rate 3.0% 3.5%
Equity market risk premium 5.8% 6.8%
Adjusted beta 0.89 0.97
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.10% 10.60%
Tax rate 29.60% 39.70%
Debt/Equity ratio 0.3 0.3
Cost of debt 4.00% 6.00%
After-tax WACC 6.9% 9.0%
Selected WACC 7.9%

VK.PA'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 VK.PA:

cost_of_equity (9.35%) = risk_free_rate (3.25%) + equity_risk_premium (6.30%) * adjusted_beta (0.89) + 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.