GGEO.ST WACC - Weighted Average Cost of Capital

The WACC of Guideline Geo AB (publ) (GGEO.ST) is 7.3%.

The Cost of Equity of Guideline Geo AB (publ) (GGEO.ST) is 7.40%.

The Cost of Debt of Guideline Geo AB (publ) (GGEO.ST) is 6.10%.

	Range	Selected
Cost of equity	6.40% - 8.40%	7.40%
Tax rate	6.30% - 11.60%	8.95%
Cost of debt	6.10% - 6.10%	6.10%
WACC	6.3% - 8.3%	7.3%

WACC

GGEO.ST WACC calculation

Category	Low	High

Long-term bond rate	2.5%	3.0%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.75	0.81

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.40%	8.40%

Tax rate	6.30%	11.60%
Debt/Equity ratio	0.06	0.06
Cost of debt	6.10%	6.10%

After-tax WACC	6.3%	8.3%


Selected WACC	7.3%

GGEO.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 GGEO.ST:

cost_of_equity (7.40%) = risk_free_rate (2.75%) + equity_risk_premium (5.60%) * adjusted_beta (0.75) + 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.