The WACC of Swiss Steel Holding AG (STLN.SW) is 9.2%.
| Range | Selected | |
| Cost of equity | 57.10% - 75.20% | 66.15% |
| Tax rate | 5.80% - 13.00% | 9.40% |
| Cost of debt | 6.80% - 7.00% | 6.90% |
| WACC | 8.9% - 9.5% | 9.2% |
| Category | Low | High |
| Long-term bond rate | 1.0% | 1.5% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 11 | 12.01 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 57.10% | 75.20% |
| Tax rate | 5.80% | 13.00% |
| Debt/Equity ratio | 19.46 | 19.46 |
| Cost of debt | 6.80% | 7.00% |
| After-tax WACC | 8.9% | 9.5% |
| Selected WACC | 9.2% | |
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 STLN.SW:
cost_of_equity (66.15%) = risk_free_rate (1.25%) + equity_risk_premium (5.60%) * adjusted_beta (11) + 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.