The WACC of VEON Ltd (VEON.AS) is 7.0%.
| Range | Selected | |
| Cost of equity | 10.20% - 16.10% | 13.15% |
| Tax rate | 25.00% - 25.30% | 25.15% |
| Cost of debt | 5.50% - 6.20% | 5.85% |
| WACC | 6.0% - 8.1% | 7.0% |
| Category | Low | High |
| Long-term bond rate | 2.6% | 3.1% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 1.51 | 2.06 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 10.20% | 16.10% |
| Tax rate | 25.00% | 25.30% |
| Debt/Equity ratio | 2.28 | 2.28 |
| Cost of debt | 5.50% | 6.20% |
| After-tax WACC | 6.0% | 8.1% |
| Selected WACC | 7.0% | |
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 VEON.AS:
cost_of_equity (13.15%) = risk_free_rate (2.85%) + equity_risk_premium (5.60%) * adjusted_beta (1.51) + 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.