The WACC of Capacent Holding AB (publ) (CAPAC.ST) is 6.6%.
| Range | Selected | |
| Cost of equity | 5.40% - 7.50% | 6.45% |
| Tax rate | 25.50% - 27.90% | 26.70% |
| Cost of debt | 4.00% - 27.20% | 15.60% |
| WACC | 5.3% - 8.0% | 6.6% |
| Category | Low | High |
| Long-term bond rate | 2.3% | 2.8% |
| Equity market risk premium | 4.7% | 5.7% |
| Adjusted beta | 0.54 | 0.64 |
| Additional risk adjustments | 0.5% | 1.0% |
| Cost of equity | 5.40% | 7.50% |
| Tax rate | 25.50% | 27.90% |
| Debt/Equity ratio | 0.04 | 0.04 |
| Cost of debt | 4.00% | 27.20% |
| After-tax WACC | 5.3% | 8.0% |
| Selected WACC | 6.6% | |
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 CAPAC.ST:
cost_of_equity (6.45%) = risk_free_rate (2.55%) + equity_risk_premium (5.20%) * adjusted_beta (0.54) + risk_adjustments (0.75%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.