The WACC of Humble Group AB (HUMBLE.ST) is 9.1%.
| Range | Selected | |
| Cost of equity | 5.10% - 8.80% | 6.95% |
| Tax rate | 16.30% - 43.30% | 29.80% |
| Cost of debt | 5.70% - 35.00% | 20.35% |
| WACC | 5.0% - 13.2% | 9.1% |
| Category | Low | High |
| Long-term bond rate | 2.5% | 3.0% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.51 | 0.87 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.10% | 8.80% |
| Tax rate | 16.30% | 43.30% |
| Debt/Equity ratio | 0.66 | 0.66 |
| Cost of debt | 5.70% | 35.00% |
| After-tax WACC | 5.0% | 13.2% |
| Selected WACC | 9.1% | |
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 HUMBLE.ST:
cost_of_equity (6.95%) = risk_free_rate (2.75%) + equity_risk_premium (5.60%) * adjusted_beta (0.51) + 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.