The WACC of Offentliga Hus I Norden AB (publ) (OFFHUS.ST) is 5.1%.
| Range | Selected | |
| Cost of equity | 5.20% - 7.40% | 6.30% |
| Tax rate | 24.60% - 25.40% | 25.00% |
| Cost of debt | 4.20% - 7.00% | 5.60% |
| WACC | 4.0% - 6.2% | 5.1% |
| Category | Low | High |
| Long-term bond rate | 2.3% | 2.8% |
| Equity market risk premium | 4.7% | 5.7% |
| Adjusted beta | 0.6 | 0.72 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.20% | 7.40% |
| Tax rate | 24.60% | 25.40% |
| Debt/Equity ratio | 1.37 | 1.37 |
| Cost of debt | 4.20% | 7.00% |
| After-tax WACC | 4.0% | 6.2% |
| Selected WACC | 5.1% | |
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 OFFHUS.ST:
cost_of_equity (6.30%) = risk_free_rate (2.55%) + equity_risk_premium (5.20%) * adjusted_beta (0.6) + 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.