The WACC of SECITS Holding AB (SECI.ST) is 9.9%.
| Range | Selected | |
| Cost of equity | 6.30% - 12.40% | 9.35% |
| Tax rate | 20.60% - 20.90% | 20.75% |
| Cost of debt | 7.00% - 18.50% | 12.75% |
| WACC | 5.7% - 14.2% | 9.9% |
| Category | Low | High |
| Long-term bond rate | 2.5% | 3.0% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.75 | 1.45 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.30% | 12.40% |
| Tax rate | 20.60% | 20.90% |
| Debt/Equity ratio | 4.23 | 4.23 |
| Cost of debt | 7.00% | 18.50% |
| After-tax WACC | 5.7% | 14.2% |
| Selected WACC | 9.9% | |
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 SECI.ST:
cost_of_equity (9.35%) = risk_free_rate (2.75%) + equity_risk_premium (5.60%) * adjusted_beta (0.75) + 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.