TFBANK.ST WACC - Weighted Average Cost of Capital
The WACC of TF Bank AB (TFBANK.ST) is 6.3%.
| Range | Selected | |
| Cost of equity | 4.9% - 7.8% | 6.35% |
| Tax rate | 21.4% - 21.7% | 21.55% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 4.9% - 7.6% | 6.3% |
| Category | Low | High |
| Long-term bond rate | 2.5% | 3.0% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.48 | 0.71 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 4.9% | 7.8% |
| Tax rate | 21.4% | 21.7% |
| Debt/Equity ratio | 0.05 | 0.05 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 4.9% | 7.6% |
| Selected WACC | 6.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| TFBANK.ST | TF Bank AB | 0.05 | 0.41 | 0.4 |
| ARBB.L | Arbuthnot Banking Group PLC | 0.61 | 0.23 | 0.15 |
| BOS.WA | Bank Ochrony Srodowiska SA | 0.37 | 0.98 | 0.76 |
| BST.MI | Banca Sistema SpA | 28.35 | 1.13 | 0.05 |
| KOMP.OL | Komplett Bank ASA | 0.08 | 1.88 | 1.76 |
| LASP.CO | Laan & Spar Bank A/S | 0.4 | 0.18 | 0.14 |
| LHV1T.TL | LHV Group AS | 0.88 | 1.28 | 0.76 |
| PARB.OL | Pareto Bank ASA | 1.2 | 0.48 | 0.24 |
| SAB1L.VS | Siauliu Bankas AB | 0.82 | 1.35 | 0.82 |
| SPKSJF.CO | Sparekassen Sjaelland-Fyn A/S | 0.21 | 0.19 | 0.16 |
| Low | High | |
| Unlevered beta | 0.21 | 0.54 |
| Relevered beta | 0.22 | 0.57 |
| Adjusted relevered beta | 0.48 | 0.71 |
TFBANK.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 TFBANK.ST:
cost_of_equity (6.35%) = risk_free_rate (2.75%) + equity_risk_premium (5.60%) * adjusted_beta (0.48) + 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.