JAREN.OL WACC - Weighted Average Cost of Capital
The WACC of Jaeren Sparebank (JAREN.OL) is 4.8%.
| Range | Selected | |
| Cost of equity | 5.4% - 7.3% | 6.35% |
| Tax rate | 17.6% - 18.3% | 17.95% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 4.5% - 5.1% | 4.8% |
| Category | Low | High |
| Long-term bond rate | 3.3% | 3.8% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.41 | 0.49 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.4% | 7.3% |
| Tax rate | 17.6% | 18.3% |
| Debt/Equity ratio | 2.18 | 2.18 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 4.5% | 5.1% |
| Selected WACC | 4.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| JAREN.OL | Jaeren Sparebank | 2.18 | 0.04 | 0.02 |
| AURG.OL | Aurskog Sparebank | 5.01 | 0.36 | 0.07 |
| BCJ.SW | Banque Cantonale Du Jura SA | 7.58 | 0.06 | 0.01 |
| CRLA.PA | Caisse Regionale de Credit Agricole Mutuel du Languedoc | 0.96 | 0.71 | 0.4 |
| CRSU.PA | Caisse Regionale De Credit Agricole Mutuel Sud Rhone Alpes | 1.28 | 0.6 | 0.29 |
| FYNBK.CO | Fynske Bank A/S | 0.01 | 0.11 | 0.11 |
| HSPG.OL | Holand og Setskog Sparebank | 23.01 | 0.37 | 0.02 |
| SKUE.OL | Skue Sparebank | 6.51 | 0.28 | 0.04 |
| TOTG.OL | Totens Sparebank | 4.87 | 0.22 | 0.04 |
| VVL.OL | Voss Veksel og Landmandsbank ASA | 1.24 | 0.58 | 0.29 |
| Low | High | |
| Unlevered beta | 0.04 | 0.08 |
| Relevered beta | 0.12 | 0.24 |
| Adjusted relevered beta | 0.41 | 0.49 |
JAREN.OL's CAPM model and how its cost of Equity is calculated
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 JAREN.OL:
cost_of_equity (6.35%) = risk_free_rate (3.55%) + equity_risk_premium (5.60%) * adjusted_beta (0.41) + 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.