ZAL.DE
Zalando SE
Price:  
31.45 
EUR
Volume:  
1,990,982.00
Germany | Internet & Direct Marketing Retail
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ZAL.DE WACC - Weighted Average Cost of Capital

The WACC of Zalando SE (ZAL.DE) is 7.2%.

The Cost of Equity of Zalando SE (ZAL.DE) is 8.15%.
The Cost of Debt of Zalando SE (ZAL.DE) is 4.25%.

Range Selected
Cost of equity 6.70% - 9.60% 8.15%
Tax rate 33.00% - 38.60% 35.80%
Cost of debt 4.00% - 4.50% 4.25%
WACC 6.0% - 8.4% 7.2%
WACC

ZAL.DE WACC calculation

Category Low High
Long-term bond rate 2.8% 3.3%
Equity market risk premium 5.1% 6.1%
Adjusted beta 0.77 0.95
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.70% 9.60%
Tax rate 33.00% 38.60%
Debt/Equity ratio 0.21 0.21
Cost of debt 4.00% 4.50%
After-tax WACC 6.0% 8.4%
Selected WACC 7.2%

ZAL.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 ZAL.DE:

cost_of_equity (8.15%) = risk_free_rate (3.05%) + equity_risk_premium (5.60%) * adjusted_beta (0.77) + 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.