The WACC of Castle Private Equity AG (CPEN.SW) is 5.3%.
| Range | Selected | |
| Cost of equity | 4.60% - 6.70% | 5.65% |
| Tax rate | 2.30% - 4.00% | 3.15% |
| Cost of debt | 5.00% - 5.00% | 5.00% |
| WACC | 4.8% - 5.8% | 5.3% |
| Category | Low | High |
| Long-term bond rate | 1.0% | 1.5% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.42 | 0.53 |
| Additional risk adjustments | 1.5% | 2.0% |
| Cost of equity | 4.60% | 6.70% |
| Tax rate | 2.30% | 4.00% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.00% | 5.00% |
| After-tax WACC | 4.8% | 5.8% |
| Selected WACC | 5.3% | |
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 CPEN.SW:
cost_of_equity (5.65%) = risk_free_rate (1.25%) + equity_risk_premium (5.60%) * adjusted_beta (0.42) + risk_adjustments (1.75%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.