CHR.CO WACC - Weighted Average Cost of Capital

The WACC of Chr Hansen Holding A/S (CHR.CO) is 6.5%.

The Cost of Equity of Chr Hansen Holding A/S (CHR.CO) is 6.80%.

The Cost of Debt of Chr Hansen Holding A/S (CHR.CO) is 4.25%.

	Range	Selected
Cost of equity	5.70% - 7.90%	6.80%
Tax rate	22.20% - 22.80%	22.50%
Cost of debt	4.00% - 4.50%	4.25%
WACC	5.5% - 7.5%	6.5%

WACC

CHR.CO WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.58	0.68

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.70%	7.90%

Tax rate	22.20%	22.80%
Debt/Equity ratio	0.1	0.1
Cost of debt	4.00%	4.50%

After-tax WACC	5.5%	7.5%


Selected WACC	6.5%

CHR.CO'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 CHR.CO:

cost_of_equity (6.80%) = risk_free_rate (2.95%) + equity_risk_premium (5.60%) * adjusted_beta (0.58) + 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.