ELEAV.HE WACC - Weighted Average Cost of Capital

The WACC of Elecster Oyj (ELEAV.HE) is 6.3%.

The Cost of Equity of Elecster Oyj (ELEAV.HE) is 7.40%.

The Cost of Debt of Elecster Oyj (ELEAV.HE) is 6.50%.

	Range	Selected
Cost of equity	5.40% - 9.40%	7.40%
Tax rate	20.00% - 20.00%	20.00%
Cost of debt	6.00% - 7.00%	6.50%
WACC	5.1% - 7.4%	6.3%

WACC

ELEAV.HE WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	5.7%	6.7%
Adjusted beta	0.47	0.85

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.40%	9.40%

Tax rate	20.00%	20.00%
Debt/Equity ratio	1.07	1.07
Cost of debt	6.00%	7.00%

After-tax WACC	5.1%	7.4%


Selected WACC	6.3%

ELEAV.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 ELEAV.HE:

cost_of_equity (7.40%) = risk_free_rate (2.95%) + equity_risk_premium (6.20%) * adjusted_beta (0.47) + 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.