SOR.OL
Sparebanken Sor
Price:  
203.00 
NOK
Volume:  
72,769.00
Norway | Banks
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SOR.OL WACC - Weighted Average Cost of Capital

The WACC of Sparebanken Sor (SOR.OL) is 6.3%.

The Cost of Equity of Sparebanken Sor (SOR.OL) is 26.95%.
The Cost of Debt of Sparebanken Sor (SOR.OL) is 5.00%.

Range Selected
Cost of equity 22.50% - 31.40% 26.95%
Tax rate 20.50% - 20.70% 20.60%
Cost of debt 5.00% - 5.00% 5.00%
WACC 5.8% - 6.7% 6.3%
WACC

SOR.OL WACC calculation

Category Low High
Long-term bond rate 3.3% 3.8%
Equity market risk premium 5.1% 6.1%
Adjusted beta 3.75 4.43
Additional risk adjustments 0.0% 0.5%
Cost of equity 22.50% 31.40%
Tax rate 20.50% 20.70%
Debt/Equity ratio 9.05 9.05
Cost of debt 5.00% 5.00%
After-tax WACC 5.8% 6.7%
Selected WACC 6.3%

SOR.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 SOR.OL:

cost_of_equity (26.95%) = risk_free_rate (3.55%) + equity_risk_premium (5.60%) * adjusted_beta (3.75) + 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.