ECT.AS
Eurocastle Investment Ltd
Price:  
9.20 
EUR
Volume:  
2,936.00
United States | Real Estate Management & Development
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ECT.AS WACC - Weighted Average Cost of Capital

The WACC of Eurocastle Investment Ltd (ECT.AS) is 4.6%.

The Cost of Equity of Eurocastle Investment Ltd (ECT.AS) is 5.50%.
The Cost of Debt of Eurocastle Investment Ltd (ECT.AS) is 5.00%.

Range Selected
Cost of equity 4.70% - 6.30% 5.50%
Tax rate 25.00% - 25.30% 25.15%
Cost of debt 5.00% - 5.00% 5.00%
WACC 4.2% - 5.0% 4.6%
WACC

ECT.AS WACC calculation

Category Low High
Long-term bond rate 2.6% 3.1%
Equity market risk premium 5.1% 6.1%
Adjusted beta 0.33 0.36
Additional risk adjustments 0.5% 1.0%
Cost of equity 4.70% 6.30%
Tax rate 25.00% 25.30%
Debt/Equity ratio 1 1
Cost of debt 5.00% 5.00%
After-tax WACC 4.2% 5.0%
Selected WACC 4.6%

ECT.AS'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 ECT.AS:

cost_of_equity (5.50%) = risk_free_rate (2.85%) + equity_risk_premium (5.60%) * adjusted_beta (0.33) + 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.