ZEAL.CO WACC - Weighted Average Cost of Capital

The WACC of Zealand Pharma A/S (ZEAL.CO) is 6.9%.

The Cost of Equity of Zealand Pharma A/S (ZEAL.CO) is 6.85%.

The Cost of Debt of Zealand Pharma A/S (ZEAL.CO) is 7.50%.

	Range	Selected
Cost of equity	5.40% - 8.30%	6.85%
Tax rate	0.60% - 0.70%	0.65%
Cost of debt	7.00% - 8.00%	7.50%
WACC	5.4% - 8.3%	6.9%

WACC

ZEAL.CO WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.52	0.75

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.40%	8.30%

Tax rate	0.60%	0.70%
Debt/Equity ratio	0.01	0.01
Cost of debt	7.00%	8.00%

After-tax WACC	5.4%	8.3%


Selected WACC	6.9%

ZEAL.CO'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 ZEAL.CO:

cost_of_equity (6.85%) = risk_free_rate (2.95%) + equity_risk_premium (5.60%) * adjusted_beta (0.52) + 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.