SBTE.OL WACC - Weighted Average Cost of Capital
The WACC of Sparebanken Telemark (SBTE.OL) is 6.9%.
| Range | Selected | |
| Cost of equity | 8.0% - 11.8% | 9.9% |
| Tax rate | 20.1% - 20.4% | 20.25% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.0% - 7.9% | 6.9% |
| Category | Low | High |
| Long-term bond rate | 3.1% | 3.6% |
| Equity market risk premium | 4.7% | 5.7% |
| Adjusted beta | 1.04 | 1.35 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.0% | 11.8% |
| Tax rate | 20.1% | 20.4% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.0% | 7.9% |
| Selected WACC | 6.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| SBTE.OL | Sparebanken Telemark | 1.06 | 0.92 | 0.5 |
| ARBB.L | Arbuthnot Banking Group PLC | 0.61 | 0.23 | 0.16 |
| ATMA.L | Atlas Mara Ltd | 42.41 | 0.98 | 0.03 |
| BOS.WA | Bank Ochrony Srodowiska SA | 0.37 | 0.98 | 0.76 |
| BST.MI | Banca Sistema SpA | 29.53 | 1.11 | 0.05 |
| KOMP.OL | Komplett Bank ASA | 0.08 | 1.88 | 1.76 |
| MIL.WA | Bank Millennium SA | 0.43 | 1.41 | 1.05 |
| PARB.OL | Pareto Bank ASA | 1.26 | 0.47 | 0.23 |
| SAB1L.VS | Siauliu Bankas AB | 0.82 | 1.35 | 0.81 |
| SPOG.OL | Sparebanken Ost | 14.95 | 0.5 | 0.04 |
| TATT.AT | Attica Bank SA | 0.13 | 3.99 | 3.61 |
| Low | High | |
| Unlevered beta | 0.23 | 0.76 |
| Relevered beta | 1.06 | 1.52 |
| Adjusted relevered beta | 1.04 | 1.35 |
SBTE.OL'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 SBTE.OL:
cost_of_equity (9.90%) = risk_free_rate (3.35%) + equity_risk_premium (5.20%) * adjusted_beta (1.04) + 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.