DIGIA.HE WACC - Weighted Average Cost of Capital

The WACC of Digia Oyj (DIGIA.HE) is 6.9%.

The Cost of Equity of Digia Oyj (DIGIA.HE) is 7.45%.

The Cost of Debt of Digia Oyj (DIGIA.HE) is 4.25%.

	Range	Selected
Cost of equity	6.60% - 8.30%	7.45%
Tax rate	20.60% - 20.80%	20.70%
Cost of debt	4.00% - 4.50%	4.25%
WACC	6.1% - 7.7%	6.9%

WACC

DIGIA.HE WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	5.7%	6.7%
Adjusted beta	0.68	0.69

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.60%	8.30%

Tax rate	20.60%	20.80%
Debt/Equity ratio	0.16	0.16
Cost of debt	4.00%	4.50%

After-tax WACC	6.1%	7.7%


Selected WACC	6.9%

DIGIA.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 DIGIA.HE:

cost_of_equity (7.45%) = risk_free_rate (2.95%) + equity_risk_premium (6.20%) * adjusted_beta (0.68) + 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.