The WACC of Ice Group ASA (ICEGR.OL) is 6.2%.
| Range | Selected | |
| Cost of equity | 41.20% - 69.50% | 55.35% |
| Tax rate | 0.40% - 0.70% | 0.55% |
| Cost of debt | 4.00% - 7.00% | 5.50% |
| WACC | 4.6% - 7.9% | 6.2% |
| Category | Low | High |
| Long-term bond rate | 3.1% | 3.6% |
| Equity market risk premium | 4.7% | 5.7% |
| Adjusted beta | 8.04 | 11.39 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 41.20% | 69.50% |
| Tax rate | 0.40% | 0.70% |
| Debt/Equity ratio | 64.46 | 64.46 |
| Cost of debt | 4.00% | 7.00% |
| After-tax WACC | 4.6% | 7.9% |
| Selected WACC | 6.2% | |
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 ICEGR.OL:
cost_of_equity (55.35%) = risk_free_rate (3.35%) + equity_risk_premium (5.20%) * adjusted_beta (8.04) + 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.