Prompt: According to the annual report of Allianz¹, the WACC for 2022 was
According to the annual report of Allianz¹, the WACC for 2022 was **7.12%**. This is the weighted average cost of capital that the company is expected to pay on average to all its security holders to finance its assets. The WACC is commonly referred to as the firm’s cost of capital and is calculated as follows:
WACC = E / (E + D) * Cost of Equity + D / (E + D) * Cost of Debt * (1 — Tax Rate)
where E is the market value of equity, D is the book value of debt, Cost of Equity is the required return on equity, Cost of Debt is the interest rate on debt, and Tax Rate is the corporate tax rate.
The WACC for 2022 is based on the following assumptions and data:
- The market value of equity (E) is €90,056.37 million, which is the market capitalization of Allianz as of today².
- The book value of debt (D) is €41,977 million, which is the total financial liabilities of Allianz as of December 31, 202²¹.
- The cost of equity is 9.29%, which is the expected return on the market portfolio minus the risk-free rate, multiplied by the beta of Allianz. The market portfolio return is assumed to be 10%, the risk-free rate is assumed to be 0.5%, and the beta of Allianz is 0.9⁵².
- The cost of debt is 2.5%, which is the average interest rate on the long-term debt of Allianz as of December 31, 202²¹.
- The tax rate is 25%, which is the effective tax rate of Allianz for 202²¹.
Using these values, the WACC for 2022 can be calculated as:
WACC = 90056.37 / (90056.37 + 41977) * 9.29% + 41977 / (90056.37 + 41977) * 2.5% * (1–25%) = 7.12%
The WACC for 2022 is lower than the WACC for 2021, which was 7.76%². This means that the cost of capital for Allianz has decreased, which is beneficial for the company as it can invest in more profitable projects and increase its value. However, the WACC for 2022 is still higher than the average WACC for the media industry, which was 6.9% as of September 202³³. This means that Allianz faces more competition and risk in its industry than the average media company.
Quelle: Unterhaltung mit Bing, 6.11.2023
(1) Kennzahlen — Allianz.com. https://www.allianz.com/de/investor_relations/ergebnisse-berichte/kennzahlen.html.
(2) Allianz SE (MIL:ALV) WACC — GuruFocus. https://www.gurufocus.com/term/wacc/MIL:ALV/WACC-Percentage/Allianz%20SE.
(3) Kapitalmarktdaten Medien — PwC eValuation Data Deutschland. https://pwc-tools.de/kapitalkosten/kapitalmarktdaten-medien/.
