BITTI.HE WACC - Weighted Average Cost of Capital
The WACC of Bittium Oyj (BITTI.HE) is 7.1%.
| Range | Selected | |
| Cost of equity | 6.2% - 8.6% | 7.4% |
| Tax rate | 20.0% - 31.8% | 25.9% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 6.0% - 8.2% | 7.1% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 5.7% | 6.7% |
| Adjusted beta | 0.62 | 0.72 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.2% | 8.6% |
| Tax rate | 20.0% | 31.8% |
| Debt/Equity ratio | 0.07 | 0.07 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 6.0% | 8.2% |
| Selected WACC | 7.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| BITTI.HE | Bittium Oyj | 0.07 | 0.54 | 0.51 |
| ABS.WA | Asseco Business Solutions SA | 0.02 | 0.64 | 0.63 |
| ADVE.ST | Advenica AB (publ) | 0.02 | 0.94 | 0.93 |
| BLTG.L | Blancco Technology Group PLC | 0.03 | -0.78 | -0.76 |
| IVU.DE | IVU Traffic Technologies AG | 0.06 | 0.39 | 0.38 |
| KBT.L | K3 Business Technology Group PLC | 0.02 | 0.75 | 0.75 |
| PITE.MI | Piteco SpA | 0.2 | 0.29 | 0.26 |
| QTX.L | Quartix Holdings PLC | 0 | 1.12 | 1.11 |
| VMX.PA | Verimatrix SA | 1.48 | 0.86 | 0.43 |
| WAS.WA | Wasko SA | 0.21 | 0.35 | 0.31 |
| Low | High | |
| Unlevered beta | 0.41 | 0.56 |
| Relevered beta | 0.43 | 0.58 |
| Adjusted relevered beta | 0.62 | 0.72 |
BITTI.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 BITTI.HE:
cost_of_equity (7.40%) = risk_free_rate (2.95%) + equity_risk_premium (6.20%) * adjusted_beta (0.62) + 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.