The WACC of Acroud AB (ACROUD.ST) is 11.0%.
| Range | Selected | |
| Cost of equity | 6.00% - 10.60% | 8.30% |
| Tax rate | 6.80% - 10.60% | 8.70% |
| Cost of debt | 10.00% - 19.50% | 14.75% |
| WACC | 7.7% - 14.2% | 11.0% |
| Category | Low | High |
| Long-term bond rate | 2.5% | 3.0% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.68 | 1.15 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.00% | 10.60% |
| Tax rate | 6.80% | 10.60% |
| Debt/Equity ratio | 1.11 | 1.11 |
| Cost of debt | 10.00% | 19.50% |
| After-tax WACC | 7.7% | 14.2% |
| Selected WACC | 11.0% | |
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 ACROUD.ST:
cost_of_equity (8.30%) = risk_free_rate (2.75%) + equity_risk_premium (5.60%) * adjusted_beta (0.68) + 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.