DEMANT.CO WACC - Weighted Average Cost of Capital

The WACC of Demant A/S (DEMANT.CO) is 7.2%.

The Cost of Equity of Demant A/S (DEMANT.CO) is 8.15%.

The Cost of Debt of Demant A/S (DEMANT.CO) is 4.35%.

	Range	Selected
Cost of equity	6.90% - 9.40%	8.15%
Tax rate	22.20% - 22.80%	22.50%
Cost of debt	4.00% - 4.70%	4.35%
WACC	6.1% - 8.2%	7.2%

WACC

DEMANT.CO WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.81	0.93

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.90%	9.40%

Tax rate	22.20%	22.80%
Debt/Equity ratio	0.26	0.26
Cost of debt	4.00%	4.70%

After-tax WACC	6.1%	8.2%


Selected WACC	7.2%

DEMANT.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 DEMANT.CO:

cost_of_equity (8.15%) = risk_free_rate (2.95%) + equity_risk_premium (5.60%) * adjusted_beta (0.81) + 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.