WIZZ.L
Wizz Air Holdings PLC
Price:  
1,044.00 
GBP
Volume:  
1,499,635.00
Switzerland | Airlines
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WIZZ.L WACC - Weighted Average Cost of Capital

The WACC of Wizz Air Holdings PLC (WIZZ.L) is 12.9%.

The Cost of Equity of Wizz Air Holdings PLC (WIZZ.L) is 18.65%.
The Cost of Debt of Wizz Air Holdings PLC (WIZZ.L) is 12.50%.

Range Selected
Cost of equity 13.40% - 23.90% 18.65%
Tax rate 3.80% - 6.00% 4.90%
Cost of debt 4.00% - 21.00% 12.50%
WACC 5.4% - 20.4% 12.9%
WACC

WIZZ.L WACC calculation

Category Low High
Long-term bond rate 4.0% 4.5%
Equity market risk premium 6.0% 7.0%
Adjusted beta 1.58 2.71
Additional risk adjustments 0.0% 0.5%
Cost of equity 13.40% 23.90%
Tax rate 3.80% 6.00%
Debt/Equity ratio 5.14 5.14
Cost of debt 4.00% 21.00%
After-tax WACC 5.4% 20.4%
Selected WACC 12.9%

WIZZ.L'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 WIZZ.L:

cost_of_equity (18.65%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (1.58) + 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.