Paradox Interactive ABFRA:ETA +0.09%80 WACC % is 9.48% as of Jun. 26, 2026, which is 159% above its 10-year median of 3.66. GuruFocus rates FRA:ETA with a GF Score™ of 80/100 and a GF Value™ of €16.07 (Significantly Undervalued). The stock has 5 warning signs investors should review. Among 571 Interactive Media companies, Paradox Interactive AB ranks better than 79.33% on this metric.
As of today (2026-06-26), Paradox Interactive AB's weighted average cost of capital is 9.48%%. Paradox Interactive AB's ROIC % is 3.63% (calculated using TTM income statement data).
Paradox Interactive AB earns returns that do not match up to its cost of capital. It will destroy value as it grows.
For a comprehensive WACC calculation, please access the WACC Calculator.
Paradox Interactive AB (FRA:ETA) WACC % Explanation
Because it costs money to raise capital. A firm that generates higher ROIC % than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.
As of today, Paradox Interactive AB's weighted average cost of capital is 9.48%%. Paradox Interactive AB's ROIC % is 3.63% (calculated using TTM income statement data).
Paradox Interactive AB earns returns that do not match up to its cost of capital. It will destroy value as it grows.
Be Aware
1. GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding latest one-year quarterly average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together.
For companies that report quarterly, GuruFocus combines all of the most recent year's quarterly debt data from the beginning of the year to the year-end and calculates the average.
For companies that report semi-annually, GuruFocus combines all of the most recent year's semi-annual debt data from the start of the year to the year-end and calculates the average.
For companies that report annually, GuruFocus combines the beginning and ending annual debt data from the most recent year and then calculates the average.
2. The WACC formula discussed above does not include Preferred Stock. Please adjust if preferred stock is considered.
3. (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.
4. GuruFocus uses the latest TTM Interest Expense divided by the latest one-year quarterly average debt to get the simplified cost of debt.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the Electronic Gaming & Multimedia subindustry, Paradox Interactive AB's WACC %, along with its competitors' market caps and WACC % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Paradox Interactive AB WACC % vs Interactive Media Industry
For the Interactive Media industry and Communication Services sector, Paradox Interactive AB's WACC % distribution charts can be found below:
* The bar in red indicates where Paradox Interactive AB's WACC % falls into.
The weighted average cost of capital (WACC) is the rate that a company is expected to pay on average to all its security holders to finance its assets. The WACC is commonly referred to as the firm's cost of capital. Generally speaking, a company's assets are financed by debt and equity. WACC is the average of the costs of these sources of financing, each of which is weighted by its respective use in the given situation. By taking a weighted average, we can see how much interest the company has to pay for every dollar it finances.
WACC
=
E
/
(E + D)
*
Cost of Equity
+
D
/
(E + D)
*
Cost of Debt
*
(1 - Tax Rate)
1. Weights:
Generally speaking, a company's assets are financed by debt and equity. We need to calculate the weight of equity and the weight of debt.
The market value of equity (E) is also called "Market Cap". As of today, Paradox Interactive AB's market capitalization (E) is €1190.264 Mil.
The market value of debt is typically difficult to calculate, therefore, GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding the latest one-year quarterly average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together. As of Mar. 2026, Paradox Interactive AB's latest one-year quarterly average Book Value of Debt (D) is €10.9252 Mil.
a) weight of equity = E / (E + D) = 1190.264 / (1190.264 + 10.9252) = 0.9909
b) weight of debt = D / (E + D) = 10.9252 / (1190.264 + 10.9252) = 0.0091
2. Cost of Equity:
GuruFocus uses Capital Asset Pricing Model (CAPM) to calculate the required rate of return. The formula is:
Cost of Equity = Risk-Free Rate of Return + Beta of Asset * (Expected Return of the Market - Risk-Free Rate of Return)
a) GuruFocus uses 10-Year Treasury Constant Maturity Rate as the risk-free rate. It is updated daily. The current risk-free rate is 2.7446%. Please go to Economic Indicators page for more information. Please note that we use the 10-Year Treasury Constant Maturity Rate of the country/region where the company is headquartered. If the data for that country/region is not available, then we will use the 10-Year Treasury Constant Maturity Rate of the United States as default.
b) Beta is the sensitivity of the expected excess asset returns to the expected excess market returns. Paradox Interactive AB's beta is 1.1357.
c) (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.
Cost of Equity = 2.7446% + 1.1357 * 6% = 9.5588%
3. Cost of Debt:
GuruFocus uses latest TTM Interest Expense divided by the latest one-year quarterly average debt to get the simplified cost of debt.
As of Mar. 2026, Paradox Interactive AB's interest expense (positive number) was €0.171 Mil. Its total Book Value of Debt (D) is €10.9252 Mil.
Cost of Debt = 0.171 / 10.9252 = 1.5652%.
4. Multiply by one minus TTM Tax Rate:
GuruFocus uses the most recent TTM Tax Expense divided by the most recent TTM Pre-Tax Income to calculate the tax rate. The calculated TTM tax rate is limited to between 0% and 100%. If the calculated tax rate is higher than 100%, it is set to 100%. If the calculated tax rate is less than 0%, it is set to 0%.
The latest calculated TTM Tax Rate = 2.842 / 10.793 = 26.33%.
Paradox Interactive AB's Weighted Average Cost Of Capital (WACC) for Today is calculated as:
WACC
=
E / (E + D)
*
Cost of Equity
+
D / (E + D)
*
Cost of Debt
*
(1 - Tax Rate)
=
0.9909
*
9.5588%
+
0.0091
*
1.5652%
*
(1 - 26.33%)
=
9.48%
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Paradox Interactive AB (FRA:ETA) has a WACC % of 9.48% as of Jun. 26, 2026. The weighted average cost of capital (WACC) is the average rate a company pays to finance assets. View historical data on Paradox Interactive AB and its competitors. This is 159% above median its historical median of 3.66. Over the past decade, Paradox Interactive AB's WACC % has ranged from 1.93 to 6.72. According to the industry distribution chart, Paradox Interactive AB ranks #118 out of 571 companies in the Interactive Media industry, placing it in the top 20.7%.
Is Paradox Interactive AB's WACC % too high?
Paradox Interactive AB's current WACC % of 9.48% is 159% above median its 10-year median of 3.66. Over the past 10 years, this metric has ranged from a low of 1.93 to a high of 6.72. The Interactive Media industry median WACC % is 7.09. Paradox Interactive AB's value of 9.48% is 33.7% above this industry median. Based on the distribution chart, Paradox Interactive AB ranks #118 out of 571 companies in the Interactive Media industry, which is in the top quartile — a strong position relative to peers. Overall, Paradox Interactive AB has a GF Score™ of 80/100 and is considered Significantly Undervalued, reflecting its overall financial health beyond just this single metric.
How does Paradox Interactive AB's WACC % compare to NTES and EA?
According to the Interactive Media industry distribution chart, Paradox Interactive AB ranks #118 out of 571 companies for WACC %. This places Paradox Interactive AB in the top 21% of its industry — outperforming the majority of peers. The industry median WACC % is 7.09. Paradox Interactive AB's value of 9.48% is 33.7% above this benchmark. Historically, Paradox Interactive AB's own WACC % has ranged from 1.93 to 6.72 over the past decade. While the company's 10-year median is 3.66 vs. the industry median of 7.09, Paradox Interactive AB has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good WACC % for an Interactive Media company?
The median WACC % among Interactive Media companies is 7.09, based on 571 companies in the industry. Companies in the top quartile (top 25%) have a WACC % significantly above this median, while those in the bottom quartile fall well below. However, WACC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Paradox Interactive AB's current WACC % of 9.48% is 33.7% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high WACC % mean?
A high WACC % can signal that a stock is expensive relative to its fundamentals. The weighted average cost of capital (WACC) is the average rate a company pays to finance assets. View historical data on Paradox Interactive AB and its competitors. For the Interactive Media industry, the median WACC % is 7.09 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Paradox Interactive AB's current WACC % is 9.48%, which is 159% above median its own 10-year median of 3.66. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Paradox Interactive AB stock overvalued right now?
Based on GuruFocus' analysis, Paradox Interactive AB (FRA:ETA) is currently considered Significantly Undervalued. The stock's GF Value™ is €16.07, compared to a current price of €11.12 — trading 30.8% below its estimated fair value. The current WACC % is 9.48%, which is 159% above median its 10-year median of 3.66 and 33.7% above the Interactive Media industry median of 7.09. Paradox Interactive AB's overall GF Score™ is 80/100 with 5 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is WACC % calculated?
WACC % is calculated from a company's financial statements. For Paradox Interactive AB (FRA:ETA), the current WACC % is 9.48% as of Jun. 26, 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Paradox Interactive AB (FRA:ETA) Overvalued in 2026?
Based on GuruFocus' analysis, Paradox Interactive AB stock appears to be undervalued.
The current stock price of €11.12 is trading 30.8% below its estimated GF Value™ of €16.07.
GuruFocus considers Paradox Interactive AB to be Significantly Undervalued.
Key valuation signals for FRA:ETA:
WACC %: 9.48% (159% above median its 10-year median of 3.66)
GF Value™: €16.07 vs. price of €11.12 (30.8% below fair value)
Industry Position: 33.7% above the Interactive Media median (#118 of 571)
No single metric tells the full story. See the FRA:ETA stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Paradox Interactive AB is a Swedish company. It is engaged in the development and publishing of PC-based games. The company's product portfolio includes franchise brands such as Stellaris, Europa Universalis, Hearts of Iron, Crusader Kings, Cities, Skylines, Tyranny and Magicka. Paradox is also involved in the publishing and internal development of games and licensing of White Wolf's brands. The company distributes its games through the digital platform Steam as well as on Apple, Google Play, and Sony stores. It operates its business across the world. The majority of the company's revenue comes from the United States, while it also has its presence in Sweden, Rest of Europe and Rest of the World.
80GF Score
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