SHOT.ST WACC - Weighted Average Cost of Capital

The WACC of Scandic Hotels Group AB (SHOT.ST) is 5.4%.

The Cost of Equity of Scandic Hotels Group AB (SHOT.ST) is 7.55%.

The Cost of Debt of Scandic Hotels Group AB (SHOT.ST) is 5.90%.

	Range	Selected
Cost of equity	6.10% - 9.00%	7.55%
Tax rate	19.80% - 22.40%	21.10%
Cost of debt	4.00% - 7.80%	5.90%
WACC	4.0% - 6.8%	5.4%

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	0.7	0.89

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.10%	9.00%

Tax rate	19.80%	22.40%
Debt/Equity ratio	2.71	2.71
Cost of debt	4.00%	7.80%

After-tax WACC	4.0%	6.8%


Selected WACC	5.4%

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 (7.55%) = risk_free_rate (2.75%) + equity_risk_premium (5.60%) * adjusted_beta (0.7) + 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.