The WACC of Adapteo Oyj (ADAPT.ST) is 6.8%.
| Range | Selected | |
| Cost of equity | 7.30% - 10.40% | 8.85% |
| Tax rate | 27.00% - 31.50% | 29.25% |
| Cost of debt | 4.00% - 6.40% | 5.20% |
| WACC | 5.6% - 8.0% | 6.8% |
| Category | Low | High |
| Long-term bond rate | 2.3% | 2.8% |
| Equity market risk premium | 4.7% | 5.7% |
| Adjusted beta | 1.05 | 1.24 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.30% | 10.40% |
| Tax rate | 27.00% | 31.50% |
| Debt/Equity ratio | 0.64 | 0.64 |
| Cost of debt | 4.00% | 6.40% |
| After-tax WACC | 5.6% | 8.0% |
| Selected WACC | 6.8% | |
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 ADAPT.ST:
cost_of_equity (8.85%) = risk_free_rate (2.55%) + equity_risk_premium (5.20%) * adjusted_beta (1.05) + 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.