The WACC of Ework Group AB (EWRK.ST) is 6.8%.
| Range | Selected | |
| Cost of equity | 5.60% - 8.90% | 7.25% |
| Tax rate | 20.80% - 21.00% | 20.90% |
| Cost of debt | 4.00% - 4.60% | 4.30% |
| WACC | 5.3% - 8.3% | 6.8% |
| Category | Low | High |
| Long-term bond rate | 2.5% | 3.0% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.61 | 0.88 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.60% | 8.90% |
| Tax rate | 20.80% | 21.00% |
| Debt/Equity ratio | 0.12 | 0.12 |
| Cost of debt | 4.00% | 4.60% |
| After-tax WACC | 5.3% | 8.3% |
| Selected WACC | 6.8% | |
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 EWRK.ST:
cost_of_equity (7.25%) = risk_free_rate (2.75%) + equity_risk_premium (5.60%) * adjusted_beta (0.61) + 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.