The WACC of Gurit Holding AG (GUR.SW) is 5.4%.
| Range | Selected | |
| Cost of equity | 4.20% - 7.00% | 5.60% |
| Tax rate | 22.60% - 24.70% | 23.65% |
| Cost of debt | 5.00% - 5.00% | 5.00% |
| WACC | 4.2% - 6.5% | 5.4% |
| Category | Low | High |
| Long-term bond rate | 1.6% | 2.1% |
| Equity market risk premium | 4.7% | 5.7% |
| Adjusted beta | 0.55 | 0.75 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 4.20% | 7.00% |
| Tax rate | 22.60% | 24.70% |
| Debt/Equity ratio | 0.15 | 0.15 |
| Cost of debt | 5.00% | 5.00% |
| After-tax WACC | 4.2% | 6.5% |
| Selected WACC | 5.4% | |
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 GUR.SW:
cost_of_equity (5.60%) = risk_free_rate (1.85%) + equity_risk_premium (5.20%) * adjusted_beta (0.55) + 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.