BHG.ST WACC - Weighted Average Cost of Capital

The WACC of BHG Group AB (BHG.ST) is 7.4%.

The Cost of Equity of BHG Group AB (BHG.ST) is 9.25%.

The Cost of Debt of BHG Group AB (BHG.ST) is 5.50%.

	Range	Selected
Cost of equity	7.90% - 10.60%	9.25%
Tax rate	14.60% - 22.80%	18.70%
Cost of debt	4.00% - 7.00%	5.50%
WACC	6.2% - 8.6%	7.4%

WACC

BHG.ST WACC calculation

Category	Low	High

Long-term bond rate	2.5%	3.0%
Equity market risk premium	5.1%	6.1%
Adjusted beta	1.05	1.16

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.90%	10.60%

Tax rate	14.60%	22.80%
Debt/Equity ratio	0.61	0.61
Cost of debt	4.00%	7.00%

After-tax WACC	6.2%	8.6%


Selected WACC	7.4%

BHG.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 BHG.ST:

cost_of_equity (9.25%) = risk_free_rate (2.75%) + equity_risk_premium (5.60%) * adjusted_beta (1.05) + 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.