NORTH.OL WACC - Weighted Average Cost of Capital

The WACC of North Energy ASA (NORTH.OL) is 7.8%.

The Cost of Equity of North Energy ASA (NORTH.OL) is 6.60%.

The Cost of Debt of North Energy ASA (NORTH.OL) is 15.45%.

	Range	Selected
Cost of equity	5.70% - 7.50%	6.60%
Tax rate	22.00% - 22.00%	22.00%
Cost of debt	7.00% - 23.90%	15.45%
WACC	5.7% - 9.8%	7.8%

WACC

NORTH.OL WACC calculation

Category	Low	High

Long-term bond rate	3.3%	3.8%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.47	0.51

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.70%	7.50%

Tax rate	22.00%	22.00%
Debt/Equity ratio	0.27	0.27
Cost of debt	7.00%	23.90%

After-tax WACC	5.7%	9.8%


Selected WACC	7.8%

NORTH.OL'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 NORTH.OL:

cost_of_equity (6.60%) = risk_free_rate (3.55%) + equity_risk_premium (5.60%) * adjusted_beta (0.47) + 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.