GLA1V.HE WACC - Weighted Average Cost of Capital

The WACC of Glaston Oyj Abp (GLA1V.HE) is 6.1%.

The Cost of Equity of Glaston Oyj Abp (GLA1V.HE) is 7.65%.

The Cost of Debt of Glaston Oyj Abp (GLA1V.HE) is 4.95%.

	Range	Selected
Cost of equity	6.30% - 9.00%	7.65%
Tax rate	31.50% - 34.80%	33.15%
Cost of debt	4.00% - 5.90%	4.95%
WACC	5.0% - 7.1%	6.1%

WACC

GLA1V.HE WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	5.7%	6.7%
Adjusted beta	0.63	0.79

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.30%	9.00%

Tax rate	31.50%	34.80%
Debt/Equity ratio	0.57	0.57
Cost of debt	4.00%	5.90%

After-tax WACC	5.0%	7.1%


Selected WACC	6.1%

GLA1V.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 GLA1V.HE:

cost_of_equity (7.65%) = risk_free_rate (2.95%) + equity_risk_premium (6.20%) * adjusted_beta (0.63) + 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.