The WACC of Logistea AB (publ) (LOG.ST) is 4.6%.
| Range | Selected | |
| Cost of equity | 17.50% - 34.10% | 25.80% |
| Tax rate | 24.00% - 24.60% | 24.30% |
| Cost of debt | 5.00% - 5.00% | 5.00% |
| WACC | 4.3% - 4.9% | 4.6% |
| Category | Low | High |
| Long-term bond rate | 2.3% | 2.8% |
| Equity market risk premium | 4.7% | 5.7% |
| Adjusted beta | 3.2 | 5.36 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 17.50% | 34.10% |
| Tax rate | 24.00% | 24.60% |
| Debt/Equity ratio | 24.71 | 24.71 |
| Cost of debt | 5.00% | 5.00% |
| After-tax WACC | 4.3% | 4.9% |
| Selected WACC | 4.6% | |
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 LOG.ST:
cost_of_equity (25.80%) = risk_free_rate (2.55%) + equity_risk_premium (5.20%) * adjusted_beta (3.2) + 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.