The WACC of Utenos Trikotazas AB (UTR1L.VS) is 7.7%.
| Range | Selected | |
| Cost of equity | 8.30% - 19.90% | 14.10% |
| Tax rate | 1.20% - 4.30% | 2.75% |
| Cost of debt | 4.70% - 7.00% | 5.85% |
| WACC | 5.5% - 10.0% | 7.7% |
| Category | Low | High |
| Long-term bond rate | 3.4% | 3.9% |
| Equity market risk premium | 6.3% | 7.3% |
| Adjusted beta | 0.76 | 2.11 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.30% | 19.90% |
| Tax rate | 1.20% | 4.30% |
| Debt/Equity ratio | 3.05 | 3.05 |
| Cost of debt | 4.70% | 7.00% |
| After-tax WACC | 5.5% | 10.0% |
| Selected WACC | 7.7% | |
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 UTR1L.VS:
cost_of_equity (14.10%) = risk_free_rate (3.65%) + equity_risk_premium (6.80%) * adjusted_beta (0.76) + 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.