KARE.AT WACC - Weighted Average Cost of Capital
The WACC of Karelia Tobacco Company Inc SA (KARE.AT) is 9.6%.
| Range | Selected | |
| Cost of equity | 7.7% - 11.3% | 9.5% |
| Tax rate | 22.5% - 23.3% | 22.9% |
| Cost of debt | 4.0% - 223.6% | 113.8% |
| WACC | 7.7% - 11.5% | 9.6% |
| Category | Low | High |
| Long-term bond rate | 3.3% | 3.8% |
| Equity market risk premium | 8.8% | 9.8% |
| Adjusted beta | 0.5 | 0.71 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.7% | 11.3% |
| Tax rate | 22.5% | 23.3% |
| Debt/Equity ratio | 0 | 0 |
| Cost of debt | 4.0% | 223.6% |
| After-tax WACC | 7.7% | 11.5% |
| Selected WACC | 9.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| KARE.AT | Karelia Tobacco Company Inc SA | 0 | 0.14 | 0.14 |
| ACCEL.AS | Accell Group NV | 0.17 | 1.18 | 1.04 |
| BATS.L | British American Tobacco PLC | 0.46 | 0.34 | 0.25 |
| IMB.L | Imperial Brands PLC | 0.38 | 0.28 | 0.22 |
| MGAM.L | Morgan Advanced Materials PLC | 0.67 | 1.33 | 0.88 |
| SGL.DE | SGL Carbon SE | 0.58 | 1.28 | 0.89 |
| STG.CO | Scandinavian Tobacco Group A/S | 0.8 | 0.2 | 0.12 |
| SWMA.ST | Swedish Match AB | 0.09 | 0.27 | 0.25 |
| TABAK.PR | Philip Morris CR as | 0.02 | 0.38 | 0.37 |
| TRIP.CN | Red Light Holland Corp | 0.14 | 1.5 | 1.36 |
| Low | High | |
| Unlevered beta | 0.25 | 0.57 |
| Relevered beta | 0.25 | 0.57 |
| Adjusted relevered beta | 0.5 | 0.71 |
KARE.AT'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 KARE.AT:
cost_of_equity (9.50%) = risk_free_rate (3.55%) + equity_risk_premium (9.30%) * adjusted_beta (0.5) + 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.