STG.CO WACC - Weighted Average Cost of Capital
The WACC of Scandinavian Tobacco Group A/S (STG.CO) is 6.0%.
| Range | Selected | |
| Cost of equity | 5.9% - 9.7% | 7.8% |
| Tax rate | 21.1% - 22.0% | 21.55% |
| Cost of debt | 4.0% - 5.8% | 4.9% |
| WACC | 4.7% - 7.4% | 6.0% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.61 | 0.97 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.9% | 9.7% |
| Tax rate | 21.1% | 22.0% |
| Debt/Equity ratio | 0.79 | 0.79 |
| Cost of debt | 4.0% | 5.8% |
| After-tax WACC | 4.7% | 7.4% |
| Selected WACC | 6.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| STG.CO | Scandinavian Tobacco Group A/S | 0.79 | 0.18 | 0.11 |
| BATS.L | British American Tobacco PLC | 0.5 | 0.37 | 0.26 |
| HAG.DE | Hensoldt AG | 0.13 | 1.13 | 1.03 |
| IMB.L | Imperial Brands PLC | 0.4 | 0.29 | 0.22 |
| KARE.AT | Karelia Tobacco Company Inc SA | 0 | 0.16 | 0.16 |
| NOEJ.DE | Norma Group SE | 1.12 | 1.71 | 0.91 |
| SWMA.ST | Swedish Match AB | 0.09 | 0.27 | 0.25 |
| SWTQ.SW | Schweiter Technologies AG | 0.19 | 1.37 | 1.19 |
| TABAK.PR | Philip Morris CR as | 0.02 | 0.38 | 0.37 |
| TRIP.CN | Red Light Holland Corp | 0.14 | 1.43 | 1.29 |
| Low | High | |
| Unlevered beta | 0.26 | 0.59 |
| Relevered beta | 0.42 | 0.96 |
| Adjusted relevered beta | 0.61 | 0.97 |
STG.CO'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 STG.CO:
cost_of_equity (7.80%) = risk_free_rate (2.95%) + 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.