The WACC of Sbanken ASA (SBANK.OL) is 5.6%.
Range | Selected | |
Cost of equity | 7.4% - 13.1% | 10.25% |
Tax rate | 22.5% - 23.0% | 22.75% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 4.9% - 6.4% | 5.6% |
Category | Low | High |
Long-term bond rate | 3.1% | 3.6% |
Equity market risk premium | 4.7% | 5.7% |
Adjusted beta | 0.92 | 1.57 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 7.4% | 13.1% |
Tax rate | 22.5% | 23.0% |
Debt/Equity ratio | 2.63 | 2.63 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 4.9% | 6.4% |
Selected WACC | 5.6% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
SBANK.OL | Sbanken ASA | 2.63 | 1.33 | 0.44 |
BDB.MI | Banco di Desio e della Brianza SpA | 5.54 | 0.94 | 0.18 |
BHW.WA | Bank Handlowy w Warszawie SA | 0.08 | 1.01 | 0.95 |
CVAL.MI | Banca Piccolo Credito Valtellinese SpA | 1.52 | 1.9 | 0.88 |
LHV1T.TL | LHV Group AS | 0.87 | 1.28 | 0.76 |
NLB.L | Nova Ljubljanska Banka dd Ljubljana | 0.33 | 1.09 | 0.87 |
PCZ.DE | ProCredit Holding AG & Co KGaA | 0.7 | 0.98 | 0.64 |
RING.OL | Sparebank 1 Ringerike Hadeland | 0.84 | 0.36 | 0.22 |
SOR.OL | Sparebanken Sor | 9.05 | 0.59 | 0.07 |
SPOL.OL | Sparebank 1 Ostlandet | 1.93 | 0.51 | 0.21 |
Low | High | |
Unlevered beta | 0.35 | 0.69 |
Relevered beta | 0.88 | 1.85 |
Adjusted relevered beta | 0.92 | 1.57 |
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 SBANK.OL:
cost_of_equity (10.25%) = risk_free_rate (3.35%) + equity_risk_premium (5.20%) * adjusted_beta (0.92) + 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.