SHOT.ST WACC - Weighted Average Cost of Capital

The WACC of Scandic Hotels Group AB (SHOT.ST) is 6.1%.

The Cost of Equity of Scandic Hotels Group AB (SHOT.ST) is 9.85%.

The Cost of Debt of Scandic Hotels Group AB (SHOT.ST) is 6.00%.

	Range	Selected
Cost of equity	7.50% - 12.20%	9.85%
Tax rate	22.20% - 23.40%	22.80%
Cost of debt	4.20% - 7.80%	6.00%
WACC	4.5% - 7.8%	6.1%

WACC

SHOT.ST WACC calculation

Category	Low	High

Long-term bond rate	2.5%	3.0%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.99	1.43

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.50%	12.20%

Tax rate	22.20%	23.40%
Debt/Equity ratio	2.44	2.44
Cost of debt	4.20%	7.80%

After-tax WACC	4.5%	7.8%


Selected WACC	6.1%

SHOT.ST'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 SHOT.ST:

cost_of_equity (9.85%) = risk_free_rate (2.75%) + equity_risk_premium (5.60%) * adjusted_beta (0.99) + 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.