The WACC of Intrum AB (INTRUM.ST) is 4.7%.
| Range | Selected | |
| Cost of equity | 15.80% - 33.80% | 24.80% |
| Tax rate | 28.80% - 38.70% | 33.75% |
| Cost of debt | 4.30% - 4.50% | 4.40% |
| WACC | 4.1% - 5.3% | 4.7% |
| Category | Low | High |
| Long-term bond rate | 2.5% | 3.0% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 2.61 | 4.96 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 15.80% | 33.80% |
| Tax rate | 28.80% | 38.70% |
| Debt/Equity ratio | 11.26 | 11.26 |
| Cost of debt | 4.30% | 4.50% |
| After-tax WACC | 4.1% | 5.3% |
| Selected WACC | 4.7% | |
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 INTRUM.ST:
cost_of_equity (24.80%) = risk_free_rate (2.75%) + equity_risk_premium (5.60%) * adjusted_beta (2.61) + 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.