EAM.OL WACC - Weighted Average Cost of Capital
The WACC of EAM Solar ASA (EAM.OL) is 6.1%.
| Range | Selected | |
| Cost of equity | 5.3% - 7.2% | 6.25% |
| Tax rate | 7.7% - 16.0% | 11.85% |
| Cost of debt | 6.1% - 7.0% | 6.55% |
| WACC | 5.3% - 6.9% | 6.1% |
| Category | Low | High |
| Long-term bond rate | 3.3% | 3.8% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.38 | 0.46 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.3% | 7.2% |
| Tax rate | 7.7% | 16.0% |
| Debt/Equity ratio | 0.24 | 0.24 |
| Cost of debt | 6.1% | 7.0% |
| After-tax WACC | 5.3% | 6.9% |
| Selected WACC | 6.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| EAM.OL | EAM Solar ASA | 0.24 | -4.11 | -3.37 |
| AKSUE.IS | Aksu Enerji ve Ticaret AS | 0.11 | 1.12 | 1.02 |
| ECV.DE | Encavis AG | 0.71 | 0.02 | 0.01 |
| ESUN.SW | Edisun Power Europe AG | 4.86 | 0.72 | 0.13 |
| FDE.MI | Frendy Energy SpA | 0.03 | 0.22 | 0.21 |
| IB.MI | Iniziative Bresciane Inbre SpA | 1.47 | 0 | 0 |
| MLHYE.PA | Hydro Exploitations SA | 0.54 | 0.4 | 0.27 |
| NSE.AS | New Sources Energy NV | 0.04 | 0.08 | 0.08 |
| PANNERGY.BD | PannErgy Nyrt | 0.49 | 0.34 | 0.23 |
| REN.MI | Renergetica SpA | 0.24 | 0.05 | 0.04 |
| TENERGY.AT | Terna Energy SA | 0.48 | 0.03 | 0.02 |
| Low | High | |
| Unlevered beta | 0.04 | 0.13 |
| Relevered beta | 0.07 | 0.19 |
| Adjusted relevered beta | 0.38 | 0.46 |
EAM.OL'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 EAM.OL:
cost_of_equity (6.25%) = risk_free_rate (3.55%) + equity_risk_premium (5.60%) * adjusted_beta (0.38) + 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.