The WACC of EPH European Property Holdings Ltd (EPH.SW) is 3.8%.
Range | Selected | |
Cost of equity | 3.4% - 6.1% | 4.75% |
Tax rate | 24.2% - 35.8% | 30% |
Cost of debt | 4.0% - 4.6% | 4.3% |
WACC | 3.2% - 4.5% | 3.8% |
Category | Low | High |
Long-term bond rate | 1.0% | 1.5% |
Equity market risk premium | 5.1% | 6.1% |
Adjusted beta | 0.49 | 0.68 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 3.4% | 6.1% |
Tax rate | 24.2% | 35.8% |
Debt/Equity ratio | 1.08 | 1.08 |
Cost of debt | 4.0% | 4.6% |
After-tax WACC | 3.2% | 4.5% |
Selected WACC | 3.8% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
EPH.SW | EPH European Property Holdings Ltd | 1.08 | 3.55 | 1.99 |
AMAST.ST | Amasten Fastighets AB (publ) | 0.61 | 0.87 | 0.6 |
ATEB.BR | Atenor SA | 4.32 | 0.07 | 0.02 |
BIF.BD | Budapesti Ingatlan Hasznositasi es Fejlesztesi Nyrt | 0.16 | 0.29 | 0.26 |
DMRE.DE | Demire Deutsche Mittelstand Real Estate AG | 6.76 | 0.8 | 0.14 |
EIK.IC | Eik fasteignafelag hf | 1.86 | 0.93 | 0.4 |
LOK.L | Lokn Store Group PLC | 0.19 | 1.36 | 1.2 |
ORIA.PA | Fiducial Real Estate SA | 0.41 | -0.02 | -0.01 |
REITIR.IC | Reitir fasteignafelag hf | 1.69 | 0.75 | 0.34 |
STEF B.ST | Stendorren Fastigheter AB | 1.37 | 0.04 | 0.02 |
VARN.SW | Varia US Properties AG | 2.96 | 0.38 | 0.12 |
Low | High | |
Unlevered beta | 0.14 | 0.34 |
Relevered beta | 0.24 | 0.52 |
Adjusted relevered beta | 0.49 | 0.68 |
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 EPH.SW:
cost_of_equity (4.75%) = risk_free_rate (1.25%) + equity_risk_premium (5.60%) * adjusted_beta (0.49) + 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.