Our target price of E7.7 is based on an SoTP, which values each concession with an individual DCF based on an 8.5% WACC (5.5% risk-free, 5.0% risk premium and beta of 1.3x). We subtract net debt and provision and we then apply a 20% discount to reflect lower liquidity than peers ...
The resulting return on equity (in percentage terms) can be incorporated in the fundamental concept of the finance of the WACC, which defines the weighted average of the cost of capital coming from both the equity and the debt [42,43]. The internal rate of return (IRR), the payback ...