The WACC of NGS Group AB (NGS.ST) is 6.0%.
| Range | Selected | |
| Cost of equity | 5.10% - 6.80% | 5.95% |
| Tax rate | 15.00% - 20.60% | 17.80% |
| Cost of debt | 7.00% - 7.90% | 7.45% |
| WACC | 5.2% - 6.7% | 6.0% |
| Category | Low | High |
| Long-term bond rate | 2.5% | 3.0% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.41 | 0.46 |
| Additional risk adjustments | 0.5% | 1.0% |
| Cost of equity | 5.10% | 6.80% |
| Tax rate | 15.00% | 20.60% |
| Debt/Equity ratio | 0.21 | 0.21 |
| Cost of debt | 7.00% | 7.90% |
| After-tax WACC | 5.2% | 6.7% |
| Selected WACC | 6.0% | |
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 NGS.ST:
cost_of_equity (5.95%) = risk_free_rate (2.75%) + equity_risk_premium (5.60%) * adjusted_beta (0.41) + risk_adjustments (0.75%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.