PZV1L.VS WACC - Weighted Average Cost of Capital

The WACC of Pieno Zvaigzdes AB (PZV1L.VS) is 8.7%.

The Cost of Equity of Pieno Zvaigzdes AB (PZV1L.VS) is 9.50%.

The Cost of Debt of Pieno Zvaigzdes AB (PZV1L.VS) is 5.00%.

	Range	Selected
Cost of equity	6.80% - 12.20%	9.50%
Tax rate	12.30% - 14.60%	13.45%
Cost of debt	4.10% - 5.90%	5.00%
WACC	6.3% - 11.1%	8.7%

WACC

PZV1L.VS WACC calculation

Category	Low	High

Long-term bond rate	3.4%	3.9%
Equity market risk premium	6.3%	7.3%
Adjusted beta	0.53	1.05

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.80%	12.20%

Tax rate	12.30%	14.60%
Debt/Equity ratio	0.17	0.17
Cost of debt	4.10%	5.90%

After-tax WACC	6.3%	11.1%


Selected WACC	8.7%

PZV1L.VS'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 PZV1L.VS:

cost_of_equity (9.50%) = risk_free_rate (3.65%) + equity_risk_premium (6.80%) * adjusted_beta (0.53) + 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.