ESUN.SW WACC - Weighted Average Cost of Capital

The WACC of Edisun Power Europe AG (ESUN.SW) is 4.8%.

The Cost of Equity of Edisun Power Europe AG (ESUN.SW) is 6.50%.

The Cost of Debt of Edisun Power Europe AG (ESUN.SW) is 5.10%.

	Range	Selected
Cost of equity	4.30% - 8.70%	6.50%
Tax rate	12.60% - 12.60%	12.60%
Cost of debt	4.00% - 6.20%	5.10%
WACC	3.6% - 6.0%	4.8%

WACC

ESUN.SW WACC calculation

Category	Low	High

Long-term bond rate	1.0%	1.5%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.65	1.11

Additional risk adjustments	0.0%	0.5%
Cost of equity	4.30%	8.70%

Tax rate	12.60%	12.60%
Debt/Equity ratio	4.88	4.88
Cost of debt	4.00%	6.20%

After-tax WACC	3.6%	6.0%


Selected WACC	4.8%

ESUN.SW'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 ESUN.SW:

cost_of_equity (6.50%) = risk_free_rate (1.25%) + equity_risk_premium (5.60%) * adjusted_beta (0.65) + 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.