NEWTON.ST WACC - Weighted Average Cost of Capital

The WACC of Newton Nordic AB (NEWTON.ST) is 6.3%.

The Cost of Equity of Newton Nordic AB (NEWTON.ST) is 6.20%.

The Cost of Debt of Newton Nordic AB (NEWTON.ST) is 24.80%.

	Range	Selected
Cost of equity	4.90% - 7.50%	6.20%
Tax rate	21.40% - 21.60%	21.50%
Cost of debt	7.00% - 42.60%	24.80%
WACC	4.9% - 7.6%	6.3%

WACC

NEWTON.ST WACC calculation

Category	Low	High

Long-term bond rate	2.3%	2.8%
Equity market risk premium	4.7%	5.7%
Adjusted beta	0.34	0.56

Additional risk adjustments	1.0%	1.5%
Cost of equity	4.90%	7.50%

Tax rate	21.40%	21.60%
Debt/Equity ratio	0	0
Cost of debt	7.00%	42.60%

After-tax WACC	4.9%	7.6%


Selected WACC	6.3%

NEWTON.ST'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 NEWTON.ST:

cost_of_equity (6.20%) = risk_free_rate (2.55%) + equity_risk_premium (5.20%) * adjusted_beta (0.34) + risk_adjustments (1.25%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.