The WACC of Avensia AB (AVEN.ST) is 6.5%.
Range | Selected | |
Cost of equity | 6.0% - 7.9% | 6.95% |
Tax rate | 17.0% - 21.8% | 19.4% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 5.7% - 7.4% | 6.5% |
Category | Low | High |
Long-term bond rate | 2.5% | 3.0% |
Equity market risk premium | 5.1% | 6.1% |
Adjusted beta | 0.68 | 0.72 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 6.0% | 7.9% |
Tax rate | 17.0% | 21.8% |
Debt/Equity ratio | 0.16 | 0.16 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 5.7% | 7.4% |
Selected WACC | 6.5% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
AVEN.ST | Avensia AB | 0.16 | 0.59 | 0.52 |
DLE.IR | Datalex PLC | 0.01 | 0.41 | 0.41 |
DOX.MI | Doxee SpA | 1 | 0.92 | 0.51 |
EFECTE.HE | Efecte Oyj | 0.02 | -1.1 | -1.09 |
EPSIL.AT | Epsilon Net SA | 0.04 | 0.93 | 0.91 |
GHT.L | Gresham Technologies PLC | 0.01 | 0.05 | 0.05 |
ISHA.DE | Intershop Communications AG | 0.44 | 0.31 | 0.23 |
LSX.DE | LS telcom AG | 0.48 | 0.95 | 0.69 |
NSP.MI | Neosperience SpA | 1.86 | 1.25 | 0.5 |
PSW.WA | PGS Software SA | 0.04 | 1.33 | 1.3 |
Low | High | |
Unlevered beta | 0.46 | 0.52 |
Relevered beta | 0.52 | 0.58 |
Adjusted relevered beta | 0.68 | 0.72 |
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 AVEN.ST:
cost_of_equity (6.95%) = 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.