The WACC of Odd Molly International AB (ODD.ST) is 5.4%.
| Range | Selected | |
| Cost of equity | 4.30% - 6.60% | 5.45% |
| Tax rate | 21.10% - 27.90% | 24.50% |
| Cost of debt | 7.00% - 7.00% | 7.00% |
| WACC | 4.3% - 6.6% | 5.4% |
| Category | Low | High |
| Long-term bond rate | 0.6% | 1.1% |
| Equity market risk premium | 5.2% | 6.2% |
| Adjusted beta | 0.61 | 0.71 |
| Additional risk adjustments | 0.5% | 1.0% |
| Cost of equity | 4.30% | 6.60% |
| Tax rate | 21.10% | 27.90% |
| Debt/Equity ratio | 0.01 | 0.01 |
| Cost of debt | 7.00% | 7.00% |
| After-tax WACC | 4.3% | 6.6% |
| Selected WACC | 5.4% | |
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 ODD.ST:
cost_of_equity (5.45%) = risk_free_rate (0.85%) + equity_risk_premium (5.70%) * adjusted_beta (0.61) + risk_adjustments (0.75%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.