SBO.H.V WACC - Weighted Average Cost of Capital
The WACC of Schwabo Capital Corp (SBO.H.V) is 5.1%.
| Range | Selected | |
| Cost of equity | 5.5% - 7.7% | 6.6% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 4.6% - 5.7% | 5.1% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.33 | 0.46 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.5% | 7.7% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 4.6% | 5.7% |
| Selected WACC | 5.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| SBO.H.V | Schwabo Capital Corp | 0.84 | -1.14 | -0.71 |
| JCI.H.V | JM Capital II Corp | 1.57 | 1.84 | 0.86 |
| KMC.H.V | KMT Hansa Corp | 0.01 | -0.05 | -0.05 |
| STR.H.V | Santa Rosa Resources Corp | 0.49 | 0.41 | 0.3 |
| WWSG | Worldwide Strategies Inc | 202.21 | -0.89 | -0.01 |
| Low | High | |
| Unlevered beta | -0.02 | 0.12 |
| Relevered beta | 0 | 0.19 |
| Adjusted relevered beta | 0.33 | 0.46 |
SBO.H.V'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 SBO.H.V:
cost_of_equity (6.60%) = risk_free_rate (4.15%) + equity_risk_premium (5.60%) * adjusted_beta (0.33) + 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.