The WACC of Banque Cantonale Du Jura SA (BCJ.SW) is 4.0%.
| Range | Selected | |
| Cost of equity | 4.00% - 7.00% | 5.50% |
| Tax rate | 22.50% - 24.10% | 23.30% |
| Cost of debt | 5.00% - 5.00% | 5.00% |
| WACC | 3.9% - 4.2% | 4.0% |
| Category | Low | High |
| Long-term bond rate | 1.1% | 1.6% |
| Equity market risk premium | 4.7% | 5.7% |
| Adjusted beta | 0.6 | 0.85 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 4.00% | 7.00% |
| Tax rate | 22.50% | 24.10% |
| Debt/Equity ratio | 7.58 | 7.58 |
| Cost of debt | 5.00% | 5.00% |
| After-tax WACC | 3.9% | 4.2% |
| Selected WACC | 4.0% | |
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 BCJ.SW:
cost_of_equity (5.50%) = risk_free_rate (1.35%) + equity_risk_premium (5.20%) * adjusted_beta (0.6) + 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.