The WACC of Beijer Electronics Group AB (BELE.ST) is 6.4%.
| Range | Selected | |
| Cost of equity | 5.70% - 8.20% | 6.95% |
| Tax rate | 19.30% - 29.90% | 24.60% |
| Cost of debt | 4.00% - 10.10% | 7.05% |
| WACC | 5.0% - 7.9% | 6.4% |
| Category | Low | High |
| Long-term bond rate | 0.6% | 1.1% |
| Equity market risk premium | 5.2% | 6.2% |
| Adjusted beta | 0.98 | 1.05 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.70% | 8.20% |
| Tax rate | 19.30% | 29.90% |
| Debt/Equity ratio | 0.44 | 0.44 |
| Cost of debt | 4.00% | 10.10% |
| After-tax WACC | 5.0% | 7.9% |
| Selected WACC | 6.4% | |
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 BELE.ST:
cost_of_equity (6.95%) = risk_free_rate (0.85%) + equity_risk_premium (5.70%) * adjusted_beta (0.98) + 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.