WACC in EUROS: Most literature in US based, using metrics from the US market, and then adjusting for differences with the host country. I am interested in calculating a WACC for a European project, using metrics from Europe. Any suggestions on relevant literature? Thanks!

Question

WACC in EUROS: Most literature in US based, using metrics from the US market, and then adjusting for differences with the host country.  I am interested in calculating a WACC for a European project, using metrics from Europe.  Any suggestions on relevant literature?  Thanks!

anonymous · Answer

Hi Use the ECB rate for the risk free rate (or if going back more than 15 years, use the Bundesbank rate). Then you need your equity market risk rate for Europe (I would assume 5% but there is a host of papers on this question). Then the beta for your company. Here is a link to check out : http://people.stern.nyu.edu/adamodar/New_Home_Page/data.html

anonymous · Answer

Thanks for the input Edward