The WACC of Insr Insurance Group ASA (INSR.OL) is 6.1%.
| Range | Selected | |
| Cost of equity | 10.90% - 14.10% | 12.50% |
| Tax rate | 22.00% - 22.40% | 22.20% |
| Cost of debt | 5.00% - 5.00% | 5.00% |
| WACC | 5.7% - 6.5% | 6.1% |
| Category | Low | High |
| Long-term bond rate | 3.1% | 3.6% |
| Equity market risk premium | 4.7% | 5.7% |
| Adjusted beta | 1.65 | 1.75 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 10.90% | 14.10% |
| Tax rate | 22.00% | 22.40% |
| Debt/Equity ratio | 2.89 | 2.89 |
| Cost of debt | 5.00% | 5.00% |
| After-tax WACC | 5.7% | 6.5% |
| Selected WACC | 6.1% | |
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 INSR.OL:
cost_of_equity (12.50%) = risk_free_rate (3.35%) + equity_risk_premium (5.20%) * adjusted_beta (1.65) + 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.