The WACC of Forbo Holding AG (FORN.SW) is 5.8%.
Range | Selected | |
Cost of equity | 3.9% - 7.8% | 5.85% |
Tax rate | 22.0% - 22.2% | 22.1% |
Cost of debt | 4.0% - 4.5% | 4.25% |
WACC | 3.9% - 7.6% | 5.8% |
Category | Low | High |
Long-term bond rate | 1.0% | 1.5% |
Equity market risk premium | 5.1% | 6.1% |
Adjusted beta | 0.58 | 0.96 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 3.9% | 7.8% |
Tax rate | 22.0% | 22.2% |
Debt/Equity ratio | 0.04 | 0.04 |
Cost of debt | 4.0% | 4.5% |
After-tax WACC | 3.9% | 7.6% |
Selected WACC | 5.8% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
FORN.SW | Forbo Holding AG | 0.04 | 1.17 | 1.14 |
DFS.L | DFS Furniture PLC | 1.58 | 0.44 | 0.2 |
DGKLB.IS | Dogtas Kelebek Mobilya Sanayi ve Ticaret AS | 0.78 | 1.36 | 0.85 |
FTE.WA | Fabryki Mebli Forte SA | 0.51 | 0.33 | 0.24 |
NOBI.ST | Nobia AB | 1.68 | 1.04 | 0.45 |
SUR.DE | Surteco Group SE | 1.67 | 0.11 | 0.05 |
TOM2.AS | TomTom NV | 0.07 | 1.65 | 1.56 |
VCP.L | Victoria PLC | 16.29 | 0.23 | 0.02 |
YATAS.IS | Yatas Yatak ve Yorgan Sanayi Ticaret AS | 0.22 | 1.44 | 1.23 |
HOFT | Hooker Furniture Corp | 0.17 | 1.13 | 1 |
Low | High | |
Unlevered beta | 0.36 | 0.91 |
Relevered beta | 0.37 | 0.94 |
Adjusted relevered beta | 0.58 | 0.96 |
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 FORN.SW:
cost_of_equity (5.85%) = risk_free_rate (1.25%) + equity_risk_premium (5.60%) * adjusted_beta (0.58) + 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.