WACC

The weighted average cost of capital (WACC) is a central input in company valuations, regulatory proceedings, and financial-economic analyses. Swiss Economics provides cost-of-capital services covering both the full WACC calculation and individual parameters, drawing on established methodologies and proprietary analytical tools.

We offer three types of engagement:

  • Regulatory cost of capital: We determine capital costs for use in regulatory decisions, applying a bottom-up approach tailored to the applicable regulatory framework and covering all relevant parameters.
  • Corporate cost of capital: We calculate company- or division-specific capital costs for use in valuations, value-added analyses, and damage quantification.
  • WACC Subscription: Swiss Economics provides cost-of-capital calculations on a subscription basis. Using a bottom-up approach, we cover all relevant parameters, including beta estimation via our proprietary beta tool, and conduct structured sensitivity analyses to show the effect of varying assumptions. The subscription is available in several service tiers, differing in flexibility and update frequency. Further details are available on request.

We advise companies, courts, and public authorities on the derivation of capital cost parameters, with careful attention to currency, inflation, and risk profile.

The parameters we cover include:

  • Risk-free rate: Derived in line with regulatory and academic practice, typically using government bonds or proxy approaches (such as default-rate methodologies) where government bond markets are illiquid or unavailable.
  • Beta estimation: Equity and asset betas estimated using regression analysis, with sensitivity analyses covering levering and delevering conventions (such as Hamada and Harris-Pringle), data frequency, and averaging windows.
  • Market risk premium: Assessed with reference to current academic and regulatory debate on appropriate methodology, including historical excess returns, total market returns, and forward-looking models.
  • Cost of debt and debt premia: Derived using current methods, including index-based approaches and estimation of debt premia over the risk-free rate, calibrated to market conditions and credit information.
  • WACC calculation: Calculated from the cost of equity and cost of debt, weighted according to the company's capital structure.

Contact

Nina Schnyder is a Senior Economist with Swiss Economics.

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Selected Projects

Swiss Economics supported an investor in the valuation of an energy asset, taking into consideration different market and regulatory scenarios

Swiss Economics supported an international airport in the determination of the regulatory cost of capital for the next negotiation period

Swiss Economics valued a software asset for an intra-group transfer for tax purposes.

What is the appropriate cost of capital for Swiss electricity grids and renewables for 2027?

A Robust and Transparent Framework for Equity and Asset Beta Estimation

How are the capital costs in the energy sector calculated?

Do state-owned enterprises benefit from financing advantages?

How can the peer group for the calculation of the regulatory beta be determined?

What is the appropriate cost of capital for Swiss electricity grids and renewables for 2026?

Swiss Economics reviewed an existing valuation and conducted an independent DCF and market multiples valuation of disputed assets in a shareholder dispute.

How do currencies affect the risk exposure of an airport or ANSP?

What is the impact of debt structure and repayment schedule on cash flows, dividends and profit?