The WACC of Valiant Holding AG (VATN.SW) is 4.4%.
| Range | Selected | |
| Cost of equity | 3.90% - 7.70% | 5.80% |
| Tax rate | 17.40% - 18.50% | 17.95% |
| Cost of debt | 5.00% - 5.00% | 5.00% |
| WACC | 4.1% - 4.6% | 4.4% |
| Category | Low | High |
| Long-term bond rate | 1.1% | 1.6% |
| Equity market risk premium | 4.7% | 5.7% |
| Adjusted beta | 0.58 | 0.96 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 3.90% | 7.70% |
| Tax rate | 17.40% | 18.50% |
| Debt/Equity ratio | 5.71 | 5.71 |
| Cost of debt | 5.00% | 5.00% |
| After-tax WACC | 4.1% | 4.6% |
| Selected WACC | 4.4% | |
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 VATN.SW:
cost_of_equity (5.80%) = risk_free_rate (1.35%) + equity_risk_premium (5.20%) * adjusted_beta (0.58) + 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.