BOREO.HE WACC - Weighted Average Cost of Capital
The WACC of Boreo Oyj (BOREO.HE) is 6.7%.
| Range | Selected | |
| Cost of equity | 7.0% - 9.9% | 8.45% |
| Tax rate | 18.1% - 20.0% | 19.05% |
| Cost of debt | 4.0% - 8.0% | 6% |
| WACC | 5.2% - 8.2% | 6.7% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 5.7% | 6.7% |
| Adjusted beta | 0.74 | 0.92 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.0% | 9.9% |
| Tax rate | 18.1% | 20.0% |
| Debt/Equity ratio | 0.96 | 0.96 |
| Cost of debt | 4.0% | 8.0% |
| After-tax WACC | 5.2% | 8.2% |
| Selected WACC | 6.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| BOREO.HE | Boreo Oyj | 0.96 | 0.34 | 0.19 |
| ACT.WA | Action SA w restrukturyzacji | 0.01 | 0.33 | 0.33 |
| ALWEC.PA | We. Connect SA | 0.46 | 0.5 | 0.36 |
| ARMDA.IS | Armada Bilgisayar Sistemleri Sanayi ve Ticaret AS | 0.25 | 0.36 | 0.3 |
| CBTT B.ST | Christian Berner Tech Trade AB | 0.3 | 0.93 | 0.75 |
| CPI.AT | CPI SA | 1.08 | 1.51 | 0.81 |
| DESPC.IS | Despec Bilgisayar Pazarlama ve Ticaret AS | 0.58 | 0.81 | 0.55 |
| DGATE.IS | Datagate Bilgisayar Malzemeleri Ticaret AS | 0.55 | 1.44 | 1 |
| HDT.L | Holders Technology PLC | 0.06 | 0.16 | 0.16 |
| S4E.WA | S4E SA | 0.02 | 0.46 | 0.46 |
| Low | High | |
| Unlevered beta | 0.35 | 0.5 |
| Relevered beta | 0.61 | 0.88 |
| Adjusted relevered beta | 0.74 | 0.92 |
BOREO.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 BOREO.HE:
cost_of_equity (8.45%) = risk_free_rate (2.95%) + equity_risk_premium (6.20%) * 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.