2020.OL
2020 Bulkers Ltd
Price:  
128.90 
NOK
Volume:  
191,797.00
Bermuda | Marine
Valuation
Overview
Financials
Forecast
Compare
Historical Price
SolvencyDividends
Transactions
People

2020.OL WACC - Weighted Average Cost of Capital

The WACC of 2020 Bulkers Ltd (2020.OL) is 8.5%.

The Cost of Equity of 2020 Bulkers Ltd (2020.OL) is 10.20%.
The Cost of Debt of 2020 Bulkers Ltd (2020.OL) is 4.25%.

Range Selected
Cost of equity 9.00% - 11.40% 10.20%
Tax rate 0.20% - 0.60% 0.40%
Cost of debt 4.00% - 4.50% 4.25%
WACC 7.6% - 9.5% 8.5%
WACC

2020.OL WACC calculation

Category Low High
Long-term bond rate 3.3% 3.8%
Equity market risk premium 5.1% 6.1%
Adjusted beta 1.1 1.16
Additional risk adjustments 0.0% 0.5%
Cost of equity 9.00% 11.40%
Tax rate 0.20% 0.60%
Debt/Equity ratio 0.39 0.39
Cost of debt 4.00% 4.50%
After-tax WACC 7.6% 9.5%
Selected WACC 8.5%

2020.OL's CAPM model and how its cost of Equity is calculated

The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.

This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.

Here’s how we figure out the cost of equity for 2020.OL:

cost_of_equity (10.20%) = risk_free_rate (3.55%) + equity_risk_premium (5.60%) * adjusted_beta (1.1) + risk_adjustments (0.25%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.