The WACC is calculated by taking into consideration the weighted price of using the equity capital and the debt capital, without taking into account the effect of taxation (i.e. the WACC value is higher than that with the taxation effect taken into consideration and represents the pre-tax cost of the capital), by using the following formula:
To calculate the rate of return on investments, the data provided in Table 1 were used, which are applied in setting the ceilings of the natural gas prices to the natural gas and centralized supply of liquefied petroleum gas undertakings in 2023-2027.
Table 1. Data used to calculate the rate of return on investments
| Cap of cost of debt (interest rate), percent, Rd | 2,583
| The average interest rate during the most recent twelve-month period of long-term loans given to non-financial corporations, as announced by the Bank of Lithuania. |
| Premium on cost of debt | | Half of difference between the cap of cost of capital and actual cost of capital of individual company. |
| Return on equity, percent, Re | | |
- for natural gas undertakings, engaging in transmission, liquefaction, storage; - for setting tariffs for biogas plants, which supplies gas to natural gas system | 5,042
| |
| - for undertakings, engaging in natural gas distribution and in centralized supply of liquefied petroleum gas | 5,000
| |
| Share of debt capital (optimal capital structure), D | 0,50
| |
| Share of equity capital (optimal capital structure), E | 0,50
| |
| Tax rate, m | 0,15 | The income tax rate applied in Lithuania. |
| Risk-free rate of return on investments (in percent), Rf | 1,266
| The arithmetic mean of the average weighted profitability of the auctions of the Government bonds denominated in Litas (till December 31,2014) and Euros (from January 1, 2015) with the maturity period of no less than 3468 days), held during the recent ten-year period. |
| Equity risk premium (in percent), Rerp | 5,0
| |
| Beta coefficient (levered β) | | |
- for natural gas undertakings, engaging in transmission, liquefaction, storage; - for setting tariffs for biogas plants, which supplies gas to natural gas system | 0,755
| On the basis of the Report on the investment conditions in the EU member states published by the Council of European Energy Regulators (CEER), the arithmetic mean of the risk ratio in the natural gas transmission sector of the European Union member states |
| - for undertakings, engaging in natural gas distribution and in centralized supply of liquefied petroleum gas | 0,747
| On the basis of the Report on the investment conditions in the EU member states published by the Council of European Energy Regulators (CEER), the arithmetic mean of the risk ratio in the natural gas distribution sector of the European Union member states |
| Actual weighted average cost of debt capital in natural gas sector, proc. | 1,675
| |
| Actual weighted average cost of debt capital in natural gas sector without loans from international financial institutions, which are listed on page of Ministry of Finance of the Republic of Lithuania (https://finmin.lrv.lt/lt/es-ir-tarptautinis-bendradarbiavimas/tarptautines-finansu-institucijos), proc. | 2,050 | |
| AB „Amber Grid" | 3,96 |
| AB „Energijos skirstymo operatorius" | 3,99 |
| AB agrofirma „Josvainiai" | 3,60 |
| UAB Gren Lietuva | 3,75 |
| UAB „Intergas" | 3,73 |
| UAB „SG dujos" | 4,02 |
| AB „Klaipėdos nafta" | 4,16 |
Archive 2022 year
