EAB.HE WACC - Weighted Average Cost of Capital

The WACC of EAB Group Oyj (EAB.HE) is 5.6%.

The Cost of Equity of EAB Group Oyj (EAB.HE) is 5.85%.

The Cost of Debt of EAB Group Oyj (EAB.HE) is 4.25%.

	Range	Selected
Cost of equity	4.80% - 6.90%	5.85%
Tax rate	10.00% - 13.40%	11.70%
Cost of debt	4.00% - 4.50%	4.25%
WACC	4.6% - 6.5%	5.6%

WACC

EAB.HE WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	5.7%	6.7%
Adjusted beta	0.36	0.48

Additional risk adjustments	0.0%	0.5%
Cost of equity	4.80%	6.90%

Tax rate	10.00%	13.40%
Debt/Equity ratio	0.17	0.17
Cost of debt	4.00%	4.50%

After-tax WACC	4.6%	6.5%


Selected WACC	5.6%

EAB.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 EAB.HE:

cost_of_equity (5.85%) = risk_free_rate (2.95%) + equity_risk_premium (6.20%) * adjusted_beta (0.36) + 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.