The WACC of Intellego Technologies AB (INT.ST) is 3.8%.
| Range | Selected | |
| Cost of equity | 3.40% - 4.20% | 3.80% |
| Tax rate | 11.90% - 16.60% | 14.25% |
| Cost of debt | 4.00% - 8.40% | 6.20% |
| WACC | 3.4% - 4.2% | 3.8% |
| Category | Low | High |
| Long-term bond rate | 2.5% | 3.0% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | -0.21 | -0.21 |
| Additional risk adjustments | 2.0% | 2.5% |
| Cost of equity | 3.40% | 4.20% |
| Tax rate | 11.90% | 16.60% |
| Debt/Equity ratio | 0 | 0 |
| Cost of debt | 4.00% | 8.40% |
| After-tax WACC | 3.4% | 4.2% |
| Selected WACC | 3.8% | |
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 INT.ST:
cost_of_equity (3.80%) = risk_free_rate (2.75%) + equity_risk_premium (5.60%) * adjusted_beta (-0.21) + risk_adjustments (2.25%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.