FAG.ST WACC - Weighted Average Cost of Capital
The WACC of Fagerhult AB (FAG.ST) is 6.5%.
| Range | Selected | |
| Cost of equity | 7.1% - 9.7% | 8.4% |
| Tax rate | 27.7% - 30.2% | 28.95% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 5.7% - 7.4% | 6.5% |
| Category | Low | High |
| Long-term bond rate | 2.5% | 3.0% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.91 | 1.01 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.1% | 9.7% |
| Tax rate | 27.7% | 30.2% |
| Debt/Equity ratio | 0.54 | 0.54 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 5.7% | 7.4% |
| Selected WACC | 6.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| FAG.ST | Fagerhult AB | 0.54 | 0.73 | 0.53 |
| AQ.ST | AQ Group AB | 0.04 | 1.49 | 1.44 |
| HTRO.ST | Hexatronic Group AB | 0.58 | 0.82 | 0.58 |
| IRC.MI | IRCE SpA | 1.18 | 0.27 | 0.15 |
| MRN.PA | Mersen SA | 1 | 1.44 | 0.84 |
| PM.SW | Phoenix Mecano AG | 0.45 | 0.47 | 0.35 |
| SARKY.IS | Sarkuysan Elektrolitik Bakir Sanayi ve Ticaret AS | 0.41 | 0.88 | 0.68 |
| SGL.DE | SGL Carbon SE | 0.53 | 1.13 | 0.82 |
| VLX.L | Volex PLC | 0.29 | 1.85 | 1.53 |
| XPP.L | XP Power Ltd | 0.82 | 1.04 | 0.65 |
| Low | High | |
| Unlevered beta | 0.62 | 0.73 |
| Relevered beta | 0.87 | 1.01 |
| Adjusted relevered beta | 0.91 | 1.01 |
FAG.ST'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 FAG.ST:
cost_of_equity (8.40%) = risk_free_rate (2.75%) + equity_risk_premium (5.60%) * adjusted_beta (0.91) + 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.