The WACC of EPH European Property Holdings Ltd (EPH.SW) is 3.9%.
| Range | Selected | |
| Cost of equity | 3.50% - 6.20% | 4.85% |
| Tax rate | 21.70% - 33.30% | 27.50% |
| Cost of debt | 4.00% - 4.60% | 4.30% |
| WACC | 3.3% - 4.6% | 3.9% |
| Category | Low | High |
| Long-term bond rate | 1.0% | 1.5% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.5 | 0.7 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 3.50% | 6.20% |
| Tax rate | 21.70% | 33.30% |
| Debt/Equity ratio | 1.08 | 1.08 |
| Cost of debt | 4.00% | 4.60% |
| After-tax WACC | 3.3% | 4.6% |
| Selected WACC | 3.9% | |
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 (4.85%) = risk_free_rate (1.25%) + equity_risk_premium (5.60%) * adjusted_beta (0.5) + 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.