The WACC of Websolute SpA (WEB.MI) is 7.2%.
Range | Selected | |
Cost of equity | 7.3% - 9.5% | 8.4% |
Tax rate | 24.0% - 24.0% | 24% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 6.4% - 8.1% | 7.2% |
Category | Low | High |
Long-term bond rate | 4.3% | 4.8% |
Equity market risk premium | 8.8% | 9.8% |
Adjusted beta | 0.34 | 0.43 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 7.3% | 9.5% |
Tax rate | 24.0% | 24.0% |
Debt/Equity ratio | 0.35 | 0.35 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 6.4% | 8.1% |
Selected WACC | 7.2% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
WEB.MI | Websolute SpA | 0.35 | 0.37 | 0.29 |
ALALO.PA | Acheter Louer Fr SA | 6.3 | -1.99 | -0.34 |
ALPLA.PA | Planet Media SA | 6.67 | -0.84 | -0.14 |
ASWN.SW | Asmallworld AG | 0.2 | -0.12 | -0.1 |
BBSN.L | Brave Bison Group PLC | 0.04 | -0.28 | -0.27 |
XLM.L | XLMedia PLC | 1.01 | 0.15 | 0.09 |
YOC.DE | Yoc AG | 0.04 | 0.88 | 0.85 |
CNFN | Cfn Enterprises Inc | 0.33 | 0.93 | 0.74 |
TPNI | Pulse Network Inc | 3420.46 | 1.28 | 0 |
Low | High | |
Unlevered beta | -0.08 | 0.07 |
Relevered beta | 0.01 | 0.15 |
Adjusted relevered beta | 0.34 | 0.43 |
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 WEB.MI:
cost_of_equity (8.40%) = risk_free_rate (4.55%) + equity_risk_premium (9.30%) * adjusted_beta (0.34) + 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.