The WACC of Endomines AB (publ) (ENDO.ST) is 5.3%.
| Range | Selected | |
| Cost of equity | 4.70% - 6.20% | 5.45% |
| Tax rate | -% - 0.10% | 0.05% |
| Cost of debt | 5.00% - 5.00% | 5.00% |
| WACC | 4.8% - 5.8% | 5.3% |
| Category | Low | High |
| Long-term bond rate | 2.5% | 3.0% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.33 | 0.35 |
| Additional risk adjustments | 0.5% | 1.0% |
| Cost of equity | 4.70% | 6.20% |
| Tax rate | -% | 0.10% |
| Debt/Equity ratio | 0.53 | 0.53 |
| 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 ENDO.ST:
cost_of_equity (5.45%) = risk_free_rate (2.75%) + 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.