The WACC of Vilkyskiu Pienine AB (VLP1L.VS) is 9.8%.
| Range | Selected | |
| Cost of equity | 8.80% - 12.30% | 10.55% |
| Tax rate | 9.20% - 10.50% | 9.85% |
| Cost of debt | 4.00% - 4.50% | 4.25% |
| WACC | 8.2% - 11.3% | 9.8% |
| Category | Low | High |
| Long-term bond rate | 3.4% | 3.9% |
| Equity market risk premium | 6.3% | 7.3% |
| Adjusted beta | 0.85 | 1.08 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.80% | 12.30% |
| Tax rate | 9.20% | 10.50% |
| Debt/Equity ratio | 0.14 | 0.14 |
| Cost of debt | 4.00% | 4.50% |
| After-tax WACC | 8.2% | 11.3% |
| Selected WACC | 9.8% | |
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 VLP1L.VS:
cost_of_equity (10.55%) = risk_free_rate (3.65%) + equity_risk_premium (6.80%) * adjusted_beta (0.85) + 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.