NLFSK.CO WACC - Weighted Average Cost of Capital

The WACC of Nilfisk Holding A/S (NLFSK.CO) is 7.6%.

The Cost of Equity of Nilfisk Holding A/S (NLFSK.CO) is 11.35%.

The Cost of Debt of Nilfisk Holding A/S (NLFSK.CO) is 4.70%.

	Range	Selected
Cost of equity	9.80% - 12.90%	11.35%
Tax rate	25.50% - 25.70%	25.60%
Cost of debt	4.50% - 4.90%	4.70%
WACC	6.7% - 8.4%	7.6%

WACC

NLFSK.CO WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	5.1%	6.1%
Adjusted beta	1.39	1.5

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.80%	12.90%

Tax rate	25.50%	25.70%
Debt/Equity ratio	0.93	0.93
Cost of debt	4.50%	4.90%

After-tax WACC	6.7%	8.4%


Selected WACC	7.6%

NLFSK.CO'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 NLFSK.CO:

cost_of_equity (11.35%) = risk_free_rate (2.95%) + equity_risk_premium (5.60%) * adjusted_beta (1.39) + 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.