KVIKA.IC WACC - Weighted Average Cost of Capital
The WACC of Kvika banki hf (KVIKA.IC) is 9.2%.
| Range | Selected | |
| Cost of equity | 10.8% - 14.0% | 12.4% |
| Tax rate | 3.6% - 7.4% | 5.5% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 8.3% - 10.1% | 9.2% |
| Category | Low | High |
| Long-term bond rate | 7.1% | 7.6% |
| Equity market risk premium | 6.3% | 7.3% |
| Adjusted beta | 0.59 | 0.81 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 10.8% | 14.0% |
| Tax rate | 3.6% | 7.4% |
| Debt/Equity ratio | 0.73 | 0.73 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 8.3% | 10.1% |
| Selected WACC | 9.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| KVIKA.IC | Kvika banki hf | 0.73 | 1.14 | 0.67 |
| ADV.PA | Advenis SA | 1.19 | 0.49 | 0.23 |
| CSGN.SW | Credit Suisse Group AG | 59.82 | 1.47 | 0.03 |
| DBK.DE | Deutsche Bank AG | 4.43 | 1.36 | 0.26 |
| GHE.L | Gresham House PLC | 0 | 1.4 | 1.4 |
| GOZDE.IS | Gozde Girisim Sermayesi Yatirim Ortakligi AS | 0.06 | 1.43 | 1.35 |
| IDM.WA | IDM SA | 0.05 | 0.15 | 0.15 |
| INVP.L | Investec PLC | 1.03 | 1.46 | 0.74 |
| KN.PA | Natixis SA | 11.41 | 1.22 | 0.1 |
| ROTH.PA | Rothschild & Co SCA | 0.09 | 0.25 | 0.23 |
| Low | High | |
| Unlevered beta | 0.23 | 0.42 |
| Relevered beta | 0.39 | 0.72 |
| Adjusted relevered beta | 0.59 | 0.81 |
KVIKA.IC'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 KVIKA.IC:
cost_of_equity (12.40%) = risk_free_rate (7.35%) + equity_risk_premium (6.80%) * adjusted_beta (0.59) + 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.