The WACC of Nobina AB (publ) (NOBINA.ST) is 5.0%.
| Range | Selected | |
| Cost of equity | 5.20% - 8.20% | 6.70% |
| Tax rate | 22.70% - 23.50% | 23.10% |
| Cost of debt | 4.00% - 4.50% | 4.25% |
| WACC | 4.2% - 5.9% | 5.0% |
| Category | Low | High |
| Long-term bond rate | 0.6% | 1.1% |
| Equity market risk premium | 5.2% | 6.2% |
| Adjusted beta | 0.87 | 1.05 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.20% | 8.20% |
| Tax rate | 22.70% | 23.50% |
| Debt/Equity ratio | 0.93 | 0.93 |
| Cost of debt | 4.00% | 4.50% |
| After-tax WACC | 4.2% | 5.9% |
| Selected WACC | 5.0% | |
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 NOBINA.ST:
cost_of_equity (6.70%) = risk_free_rate (0.85%) + equity_risk_premium (5.70%) * adjusted_beta (0.87) + 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.