BIOBV.HE WACC - Weighted Average Cost of Capital

The WACC of Biohit Oyj (BIOBV.HE) is 7.7%.

The Cost of Equity of Biohit Oyj (BIOBV.HE) is 7.45%.

The Cost of Debt of Biohit Oyj (BIOBV.HE) is 15.55%.

	Range	Selected
Cost of equity	6.00% - 8.90%	7.45%
Tax rate	13.10% - 15.20%	14.15%
Cost of debt	4.00% - 27.10%	15.55%
WACC	5.9% - 9.5%	7.7%

WACC

BIOBV.HE WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	5.7%	6.7%
Adjusted beta	0.58	0.77

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.00%	8.90%

Tax rate	13.10%	15.20%
Debt/Equity ratio	0.04	0.04
Cost of debt	4.00%	27.10%

After-tax WACC	5.9%	9.5%


Selected WACC	7.7%

BIOBV.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 BIOBV.HE:

cost_of_equity (7.45%) = risk_free_rate (2.95%) + equity_risk_premium (6.20%) * adjusted_beta (0.58) + 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.