The WACC of GALS-Development PAO (HALS.ME) is 14.3%.
| Range | Selected | |
| Cost of equity | 25.70% - 38.80% | 32.25% |
| Tax rate | 22.50% - 22.60% | 22.55% |
| Cost of debt | 4.00% - 26.30% | 15.15% |
| WACC | 5.9% - 22.6% | 14.3% |
| Category | Low | High |
| Long-term bond rate | 8.9% | 9.4% |
| Equity market risk premium | 6.9% | 7.9% |
| Adjusted beta | 2.43 | 3.65 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 25.70% | 38.80% |
| Tax rate | 22.50% | 22.60% |
| Debt/Equity ratio | 7.12 | 7.12 |
| Cost of debt | 4.00% | 26.30% |
| After-tax WACC | 5.9% | 22.6% |
| Selected WACC | 14.3% | |
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 HALS.ME:
cost_of_equity (32.25%) = risk_free_rate (9.15%) + equity_risk_premium (7.40%) * adjusted_beta (2.43) + 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.