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Post- och telestyrelsen
COST OF CAPITAL FOR
SWEDISH MOBILE
TELECOM NETWORKS
18 MARCH 2008
Author:
Henrik Balleby Olesen, Karl Lundvall, Jonatan Tops, Petter Berg
Client:
Post- och telestyrelsen
Date:
2 March, 2008
Contact:
SANKT ANNÆ PLADS 13, 2ND FLOOR | DK-1250 COPENHAGEN
PHONE: +45 7027 0740 | FAX: +45 7027 0741 | WWW.COPENHAGENECONOMICS.COM
Cost of capital for
Swedish mobile
telecom networks
TABLE OF CONTENTS
Preface ......................................................................................................................... 3
Chapter 1
Main findings.......................................................................................... 4
Chapter 2
Estimation methodology.......................................................................... 5
2.1. The WACC formula ........................................................................................ 5
2.2. Estimation....................................................................................................... 5
Chapter 3
Cost of debt............................................................................................. 7
3.1. Financial gearing............................................................................................. 7
3.2. Tax rate......................................................................................................... 10
3.3. Risk free rate................................................................................................. 10
3.4. Debt risk premium - DRP .............................................................................. 12
Chapter 4
Cost of equity........................................................................................ 15
4.1. Beta .............................................................................................................. 15
4.2. Equity risk premium – ERP ........................................................................... 20
Chapter 5...