The WACC of Auga Group AB (AUG1L.VS) is 5.2%.
| Range | Selected | |
| Cost of equity | 7.30% - 11.40% | 9.35% |
| Tax rate | 13.70% - 19.90% | 16.80% |
| Cost of debt | 4.00% - 7.00% | 5.50% |
| WACC | 4.0% - 6.4% | 5.2% |
| Category | Low | High |
| Long-term bond rate | 3.4% | 3.9% |
| Equity market risk premium | 6.3% | 7.3% |
| Adjusted beta | 0.61 | 0.94 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.30% | 11.40% |
| Tax rate | 13.70% | 19.90% |
| Debt/Equity ratio | 6.03 | 6.03 |
| Cost of debt | 4.00% | 7.00% |
| After-tax WACC | 4.0% | 6.4% |
| Selected WACC | 5.2% | |
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 AUG1L.VS:
cost_of_equity (9.35%) = risk_free_rate (3.65%) + equity_risk_premium (6.80%) * adjusted_beta (0.61) + 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.