SOGN.OL
Sogn Sparebank
Price:  
269 
NOK
Volume:  
20
Norway | Banks

SOGN.OL WACC - Weighted Average Cost of Capital

The WACC of Sogn Sparebank (SOGN.OL) is 4.9%.

The Cost of Equity of Sogn Sparebank (SOGN.OL) is 8.8%.
The Cost of Debt of Sogn Sparebank (SOGN.OL) is 5%.

RangeSelected
Cost of equity6.4% - 11.2%8.8%
Tax rate19.8% - 20.3%20.05%
Cost of debt5.0% - 5.0%5%
WACC4.5% - 5.4%4.9%
WACC

SOGN.OL WACC calculation

CategoryLowHigh
Long-term bond rate3.3%3.8%
Equity market risk premium5.1%6.1%
Adjusted beta0.611.13
Additional risk adjustments0.0%0.5%
Cost of equity6.4%11.2%
Tax rate19.8%20.3%
Debt/Equity ratio
4.144.14
Cost of debt5.0%5.0%
After-tax WACC4.5%5.4%
Selected WACC4.9%

SOGN.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 SOGN.OL:

cost_of_equity (8.80%) = risk_free_rate (3.55%) + equity_risk_premium (5.60%) * adjusted_beta (0.61) + 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.