HOME.MC WACC - Weighted Average Cost of Capital

The WACC of Neinor Homes SA (HOME.MC) is 8.4%.

The Cost of Equity of Neinor Homes SA (HOME.MC) is 9.55%.

The Cost of Debt of Neinor Homes SA (HOME.MC) is 7.15%.

	Range	Selected
Cost of equity	7.40% - 11.70%	9.55%
Tax rate	17.80% - 18.90%	18.35%
Cost of debt	6.00% - 8.30%	7.15%
WACC	6.7% - 10.2%	8.4%

WACC

HOME.MC WACC calculation

Category	Low	High

Long-term bond rate	3.1%	3.6%
Equity market risk premium	7.4%	8.4%
Adjusted beta	0.58	0.91

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.40%	11.70%

Tax rate	17.80%	18.90%
Debt/Equity ratio	0.43	0.43
Cost of debt	6.00%	8.30%

After-tax WACC	6.7%	10.2%


Selected WACC	8.4%

HOME.MC'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 HOME.MC:

cost_of_equity (9.55%) = risk_free_rate (3.35%) + equity_risk_premium (7.90%) * 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.