ARISE.ST
Arise AB
Price:  
34.30 
SEK
Volume:  
52,946.00
Sweden | Independent Power and Renewable Electricity Producers
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ARISE.ST WACC - Weighted Average Cost of Capital

The WACC of Arise AB (ARISE.ST) is 6.7%.

The Cost of Equity of Arise AB (ARISE.ST) is 5.85%.
The Cost of Debt of Arise AB (ARISE.ST) is 9.65%.

Range Selected
Cost of equity 4.70% - 7.00% 5.85%
Tax rate 20.60% - 20.90% 20.75%
Cost of debt 5.00% - 14.30% 9.65%
WACC 4.4% - 9.0% 6.7%
WACC

ARISE.ST WACC calculation

Category Low High
Long-term bond rate 2.5% 3.0%
Equity market risk premium 5.1% 6.1%
Adjusted beta 0.44 0.58
Additional risk adjustments 0.0% 0.5%
Cost of equity 4.70% 7.00%
Tax rate 20.60% 20.90%
Debt/Equity ratio 0.83 0.83
Cost of debt 5.00% 14.30%
After-tax WACC 4.4% 9.0%
Selected WACC 6.7%

ARISE.ST'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 ARISE.ST:

cost_of_equity (5.85%) = risk_free_rate (2.75%) + equity_risk_premium (5.60%) * adjusted_beta (0.44) + 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.