SBMO.AS WACC - Weighted Average Cost of Capital

The WACC of SBM Offshore NV (SBMO.AS) is 7.4%.

The Cost of Equity of SBM Offshore NV (SBMO.AS) is 12.35%.

The Cost of Debt of SBM Offshore NV (SBMO.AS) is 4.25%.

	Range	Selected
Cost of equity	10.50% - 14.20%	12.35%
Tax rate	11.70% - 14.10%	12.90%
Cost of debt	4.00% - 4.50%	4.25%
WACC	6.5% - 8.3%	7.4%

WACC

SBMO.AS WACC calculation

Category	Low	High

Long-term bond rate	2.6%	3.1%
Equity market risk premium	5.1%	6.1%
Adjusted beta	1.56	1.75

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.50%	14.20%

Tax rate	11.70%	14.10%
Debt/Equity ratio	1.32	1.32
Cost of debt	4.00%	4.50%

After-tax WACC	6.5%	8.3%


Selected WACC	7.4%

SBMO.AS'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 SBMO.AS:

cost_of_equity (12.35%) = risk_free_rate (2.85%) + equity_risk_premium (5.60%) * adjusted_beta (1.56) + 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.