ALRPR.TA WACC - Weighted Average Cost of Capital

The WACC of Alrov Properties & Lodgings Ltd (ALRPR.TA) is 7.1%.

The Cost of Equity of Alrov Properties & Lodgings Ltd (ALRPR.TA) is 12.05%.

The Cost of Debt of Alrov Properties & Lodgings Ltd (ALRPR.TA) is 5.30%.

	Range	Selected
Cost of equity	10.30% - 13.80%	12.05%
Tax rate	17.90% - 20.40%	19.15%
Cost of debt	4.00% - 6.60%	5.30%
WACC	5.9% - 8.4%	7.1%

WACC

ALRPR.TA WACC calculation

Category	Low	High

Long-term bond rate	4.8%	5.3%
Equity market risk premium	6.1%	7.1%
Adjusted beta	0.89	1.11

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.30%	13.80%

Tax rate	17.90%	20.40%
Debt/Equity ratio	1.71	1.71
Cost of debt	4.00%	6.60%

After-tax WACC	5.9%	8.4%


Selected WACC	7.1%

ALRPR.TA'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 ALRPR.TA:

cost_of_equity (12.05%) = risk_free_rate (5.05%) + equity_risk_premium (6.60%) * adjusted_beta (0.89) + 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.