The WACC of Vincenzo Zucchi SpA (ZUC.MI) is 7.2%.
| Range | Selected | |
| Cost of equity | 91.90% - 133.60% | 112.75% |
| Tax rate | 19.40% - 35.40% | 27.40% |
| Cost of debt | 4.00% - 7.30% | 5.65% |
| WACC | 5.8% - 8.5% | 7.2% |
| Category | Low | High |
| Long-term bond rate | 3.7% | 4.2% |
| Equity market risk premium | 8.3% | 9.3% |
| Adjusted beta | 10.62 | 13.85 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 91.90% | 133.60% |
| Tax rate | 19.40% | 35.40% |
| Debt/Equity ratio | 32.91 | 32.91 |
| Cost of debt | 4.00% | 7.30% |
| After-tax WACC | 5.8% | 8.5% |
| Selected WACC | 7.2% | |
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 ZUC.MI:
cost_of_equity (112.75%) = risk_free_rate (3.95%) + equity_risk_premium (8.80%) * adjusted_beta (10.62) + 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.