NLFSK.CO WACC - Weighted Average Cost of Capital

The WACC of Nilfisk Holding A/S (NLFSK.CO) is 8.9%.

The Cost of Equity of Nilfisk Holding A/S (NLFSK.CO) is 11.75%.

The Cost of Debt of Nilfisk Holding A/S (NLFSK.CO) is 6.40%.

	Range	Selected
Cost of equity	10.00% - 13.50%	11.75%
Tax rate	25.30% - 25.50%	25.40%
Cost of debt	6.30% - 6.50%	6.40%
WACC	7.9% - 10.0%	8.9%

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	1.43	1.6

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.00%	13.50%

Tax rate	25.30%	25.50%
Debt/Equity ratio	0.68	0.68
Cost of debt	6.30%	6.50%

After-tax WACC	7.9%	10.0%


Selected WACC	8.9%

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 (11.75%) = risk_free_rate (2.95%) + equity_risk_premium (5.60%) * adjusted_beta (1.43) + 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.