Cost of capital

Our cost of capital rates are derived as WACC (weighted average cost of capital) in line with market practice using a standardized method based on the capital asset pricing model (CAPM). The cost of capital rates are derived separately for each business unit, in order to reflect the different risk profiles. The parameters are based on observable market parameters and are validated using external expert recommendations. The borrowing cost rates are based on the refinancing conditions typical for the credit rating of the respective peer companies. The cost of capital rates are determined once a year and form the basis for the respective target ROCE. The target ROCE of the DB Long-Distance, DB Regional and DB Cargo business units is above their respective cost of capital rates.