The WACC of Openlimit Holding AG (O5H.DE) is 10.1%.
| Range | Selected | |
| Cost of equity | 22.90% - 66.60% | 44.75% |
| Tax rate | 2.10% - 6.00% | 4.05% |
| Cost of debt | 7.00% - 9.40% | 8.20% |
| WACC | 7.8% - 12.3% | 10.1% |
| Category | Low | High |
| Long-term bond rate | 2.0% | 2.5% |
| Equity market risk premium | 4.7% | 5.7% |
| Adjusted beta | 4.4 | 11.08 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 22.90% | 66.60% |
| Tax rate | 2.10% | 6.00% |
| Debt/Equity ratio | 15.42 | 15.42 |
| Cost of debt | 7.00% | 9.40% |
| After-tax WACC | 7.8% | 12.3% |
| Selected WACC | 10.1% | |
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 O5H.DE:
cost_of_equity (44.75%) = risk_free_rate (2.25%) + equity_risk_premium (5.20%) * adjusted_beta (4.4) + 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.