GRG1L.VS WACC - Weighted Average Cost of Capital
The WACC of Grigeo AB (GRG1L.VS) is 8.4%.
| Range | Selected | |
| Cost of equity | 7.3% - 10.0% | 8.65% |
| Tax rate | 10.3% - 11.7% | 11% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 7.1% - 9.6% | 8.4% |
| Category | Low | High |
| Long-term bond rate | 3.4% | 3.9% |
| Equity market risk premium | 6.3% | 7.3% |
| Adjusted beta | 0.61 | 0.75 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.3% | 10.0% |
| Tax rate | 10.3% | 11.7% |
| Debt/Equity ratio | 0.06 | 0.06 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 7.1% | 9.6% |
| Selected WACC | 8.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| GRG1L.VS | Grigeo AB | 0.06 | 0.39 | 0.37 |
| ALKIM.IS | Alkim Alkali Kimya AS | 0.02 | 0.42 | 0.42 |
| CRPR.L | James Cropper PLC | 1.25 | 0.21 | 0.1 |
| IBG.MC | Iberpapel Gestion SA | 0.34 | 0.17 | 0.13 |
| METSB.HE | Metsa Board Oyj | 0.43 | 1.21 | 0.87 |
| MNDI.L | Mondi PLC | 0.32 | 1.16 | 0.9 |
| NDT.MI | Neodecortech SpA | 1.06 | 0.33 | 0.17 |
| RROS.ST | Rottneros AB | 0.46 | 0.68 | 0.48 |
| STERV.HE | Stora Enso Oyj | 0.8 | 1.35 | 0.79 |
| UPM.HE | UPM-Kymmene Oyj | 0.29 | 0.98 | 0.78 |
| Low | High | |
| Unlevered beta | 0.4 | 0.6 |
| Relevered beta | 0.42 | 0.63 |
| Adjusted relevered beta | 0.61 | 0.75 |
GRG1L.VS'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 GRG1L.VS:
cost_of_equity (8.65%) = risk_free_rate (3.65%) + equity_risk_premium (6.80%) * 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.