LIFE.OL WACC - Weighted Average Cost of Capital
The WACC of Lifecare AS (LIFE.OL) is 7.1%.
| Range | Selected | |
| Cost of equity | 6.2% - 8.5% | 7.35% |
| Tax rate | 0.2% - 0.5% | 0.35% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.1% - 8.1% | 7.1% |
| Category | Low | High |
| Long-term bond rate | 3.3% | 3.8% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.56 | 0.68 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.2% | 8.5% |
| Tax rate | 0.2% | 0.5% |
| Debt/Equity ratio | 0.11 | 0.11 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.1% | 8.1% |
| Selected WACC | 7.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| LIFE.OL | Lifecare AS | 0.11 | -0.38 | -0.34 |
| MEDI.OL | Medistim ASA | 0.01 | 0.48 | 0.48 |
| OBSRV.OL | Observe Medical ASA | 2.48 | 1.61 | 0.46 |
| Low | High | |
| Unlevered beta | 0.3 | 0.47 |
| Relevered beta | 0.34 | 0.52 |
| Adjusted relevered beta | 0.56 | 0.68 |
LIFE.OL'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 LIFE.OL:
cost_of_equity (7.35%) = risk_free_rate (3.55%) + equity_risk_premium (5.60%) * adjusted_beta (0.56) + 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.