The WACC of Kopy Goldfields AB (publ) (KOPY.ST) is 12.1%.
| Range | Selected | |
| Cost of equity | 4.30% - 7.70% | 6.00% |
| Tax rate | 18.60% - 24.50% | 21.55% |
| Cost of debt | 14.30% - 20.60% | 17.45% |
| WACC | 10.2% - 14.0% | 12.1% |
| Category | Low | High |
| Long-term bond rate | 2.5% | 3.0% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.36 | 0.69 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 4.30% | 7.70% |
| Tax rate | 18.60% | 24.50% |
| Debt/Equity ratio | 4.08 | 4.08 |
| Cost of debt | 14.30% | 20.60% |
| After-tax WACC | 10.2% | 14.0% |
| Selected WACC | 12.1% | |
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 KOPY.ST:
cost_of_equity (6.00%) = risk_free_rate (2.75%) + equity_risk_premium (5.60%) * adjusted_beta (0.36) + 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.