JM.ST WACC - Weighted Average Cost of Capital
The WACC of JM AB (JM.ST) is 7.4%.
| Range | Selected | |
| Cost of equity | 9.5% - 14.9% | 12.2% |
| Tax rate | 20.4% - 22.8% | 21.6% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 6.1% - 8.7% | 7.4% |
| Category | Low | High |
| Long-term bond rate | 2.5% | 3.0% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 1.38 | 1.86 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.5% | 14.9% |
| Tax rate | 20.4% | 22.8% |
| Debt/Equity ratio | 1.18 | 1.18 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 6.1% | 8.7% |
| Selected WACC | 7.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| JM.ST | JM AB | 1.18 | 0.7 | 0.36 |
| BONAV B.ST | Bonava AB (publ) | 1.08 | 0.52 | 0.28 |
| BWY.L | Bellway PLC | 0.04 | 1.65 | 1.6 |
| CRN.L | Cairn Homes PLC | 0.15 | 0.94 | 0.85 |
| CRST.L | Crest Nicholson Holdings PLC | 0.19 | 1.87 | 1.63 |
| CSP.L | Countryside Properties PLC | 0.07 | 1.94 | 1.84 |
| GLE.L | MJ Gleeson PLC | 0.02 | 0.77 | 0.76 |
| GVR.IR | Glenveagh Properties PLC | 0.27 | 1.14 | 0.94 |
| KOF.PA | Kaufman & Broad SA | 0.23 | 0.67 | 0.56 |
| VTY.L | Vistry Group PLC | 0.29 | 1.91 | 1.55 |
| Low | High | |
| Unlevered beta | 0.81 | 1.18 |
| Relevered beta | 1.57 | 2.28 |
| Adjusted relevered beta | 1.38 | 1.86 |
JM.ST'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 JM.ST:
cost_of_equity (12.20%) = risk_free_rate (2.75%) + equity_risk_premium (5.60%) * adjusted_beta (1.38) + 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.