PZV1L.VS WACC - Weighted Average Cost of Capital

The WACC of Pieno Zvaigzdes AB (PZV1L.VS) is 7.4%.

The Cost of Equity of Pieno Zvaigzdes AB (PZV1L.VS) is 8.05%.

The Cost of Debt of Pieno Zvaigzdes AB (PZV1L.VS) is 5.50%.

	Range	Selected
Cost of equity	6.70% - 9.40%	8.05%
Tax rate	14.00% - 14.60%	14.30%
Cost of debt	4.10% - 6.90%	5.50%
WACC	6.1% - 8.7%	7.4%

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	0.52	0.67

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.70%	9.40%

Tax rate	14.00%	14.60%
Debt/Equity ratio	0.23	0.23
Cost of debt	4.10%	6.90%

After-tax WACC	6.1%	8.7%


Selected WACC	7.4%

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 (8.05%) = risk_free_rate (3.65%) + equity_risk_premium (6.80%) * adjusted_beta (0.52) + 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.