ALBAV.HE
Alandsbanken Abp
Price:  
38.70 
EUR
Volume:  
93.00
Finland | Banks
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ALBAV.HE WACC - Weighted Average Cost of Capital

The WACC of Alandsbanken Abp (ALBAV.HE) is 6.0%.

The Cost of Equity of Alandsbanken Abp (ALBAV.HE) is 8.95%.
The Cost of Debt of Alandsbanken Abp (ALBAV.HE) is 5.00%.

Range Selected
Cost of equity 6.80% - 11.10% 8.95%
Tax rate 20.00% - 20.40% 20.20%
Cost of debt 5.00% - 5.00% 5.00%
WACC 5.2% - 6.9% 6.0%
WACC

ALBAV.HE WACC calculation

Category Low High
Long-term bond rate 2.7% 3.2%
Equity market risk premium 5.7% 6.7%
Adjusted beta 0.72 1.11
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.80% 11.10%
Tax rate 20.00% 20.40%
Debt/Equity ratio 1.43 1.43
Cost of debt 5.00% 5.00%
After-tax WACC 5.2% 6.9%
Selected WACC 6.0%

ALBAV.HE'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 ALBAV.HE:

cost_of_equity (8.95%) = risk_free_rate (2.95%) + equity_risk_premium (6.20%) * adjusted_beta (0.72) + 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.