AHOLA.HE WACC - Weighted Average Cost of Capital

The WACC of Oyj Ahola Transport Abp (AHOLA.HE) is 7.7%.

The Cost of Equity of Oyj Ahola Transport Abp (AHOLA.HE) is 7.80%.

The Cost of Debt of Oyj Ahola Transport Abp (AHOLA.HE) is 4.25%.

	Range	Selected
Cost of equity	6.30% - 9.30%	7.80%
Tax rate	21.60% - 23.20%	22.40%
Cost of debt	4.00% - 4.50%	4.25%
WACC	6.2% - 9.2%	7.7%

WACC

AHOLA.HE WACC calculation

Category	Low	High

Long-term bond rate	2.5%	3.0%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.74	0.96

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.30%	9.30%

Tax rate	21.60%	23.20%
Debt/Equity ratio	0.02	0.02
Cost of debt	4.00%	4.50%

After-tax WACC	6.2%	9.2%


Selected WACC	7.7%

AHOLA.HE'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 AHOLA.HE:

cost_of_equity (7.80%) = risk_free_rate (2.75%) + equity_risk_premium (5.60%) * adjusted_beta (0.74) + 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.