LGD1L.VS WACC - Weighted Average Cost of Capital
The WACC of Litgrid AB (LGD1L.VS) is 8.1%.
| Range | Selected | |
| Cost of equity | 7.2% - 9.8% | 8.5% |
| Tax rate | 14.7% - 15.9% | 15.3% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 6.9% - 9.4% | 8.1% |
| Category | Low | High |
| Long-term bond rate | 3.4% | 3.9% |
| Equity market risk premium | 6.3% | 7.3% |
| Adjusted beta | 0.59 | 0.73 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.2% | 9.8% |
| Tax rate | 14.7% | 15.9% |
| Debt/Equity ratio | 0.08 | 0.08 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 6.9% | 9.4% |
| Selected WACC | 8.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| LGD1L.VS | Litgrid AB | 0.08 | 0.35 | 0.33 |
| AYEN.IS | Ayen Enerji AS | 1.23 | 1.5 | 0.73 |
| BDZ.WA | Elektrocieplownia Bedzin SA | 0.18 | 0.98 | 0.85 |
| DGB.AS | DGB Group NV | 0.84 | 1.04 | 0.61 |
| ENEFI.BD | ENEFI Vagyonkezelo Nyrt | 0.01 | 0.54 | 0.54 |
| FAST.AS | Fastned BV | 0.7 | 0.6 | 0.38 |
| FKRFT.OL | Fjordkraft Holding ASA | 0.23 | 0.31 | 0.26 |
| JEL.L | Jersey Electricity PLC | 0.25 | 0.28 | 0.23 |
| ODAS.IS | ODAS Elektrik Uretim Sanayi Ticaret AS | 1.06 | 1.56 | 0.82 |
| OPG.L | OPG Power Ventures PLC | 1.47 | -0.58 | -0.26 |
| Low | High | |
| Unlevered beta | 0.36 | 0.56 |
| Relevered beta | 0.39 | 0.6 |
| Adjusted relevered beta | 0.59 | 0.73 |
LGD1L.VS'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 LGD1L.VS:
cost_of_equity (8.50%) = risk_free_rate (3.65%) + 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.