KCR.HE WACC - Weighted Average Cost of Capital

The WACC of Konecranes Abp (KCR.HE) is 9.4%.

The Cost of Equity of Konecranes Abp (KCR.HE) is 10.30%.

The Cost of Debt of Konecranes Abp (KCR.HE) is 4.95%.

	Range	Selected
Cost of equity	8.90% - 11.70%	10.30%
Tax rate	24.70% - 26.00%	25.35%
Cost of debt	4.00% - 5.90%	4.95%
WACC	8.1% - 10.7%	9.4%

WACC

KCR.HE WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	5.7%	6.7%
Adjusted beta	1.09	1.19

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.90%	11.70%

Tax rate	24.70%	26.00%
Debt/Equity ratio	0.16	0.16
Cost of debt	4.00%	5.90%

After-tax WACC	8.1%	10.7%


Selected WACC	9.4%

KCR.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 KCR.HE:

cost_of_equity (10.30%) = risk_free_rate (2.95%) + equity_risk_premium (6.20%) * adjusted_beta (1.09) + 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.