KCR.HE WACC - Weighted Average Cost of Capital

The WACC of Konecranes Abp (KCR.HE) is 9.3%.

The Cost of Equity of Konecranes Abp (KCR.HE) is 9.65%.

The Cost of Debt of Konecranes Abp (KCR.HE) is 5.55%.

	Range	Selected
Cost of equity	8.30% - 11.00%	9.65%
Tax rate	23.80% - 24.50%	24.15%
Cost of debt	4.00% - 7.10%	5.55%
WACC	7.9% - 10.6%	9.3%

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	0.98	1.08

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.30%	11.00%

Tax rate	23.80%	24.50%
Debt/Equity ratio	0.07	0.07
Cost of debt	4.00%	7.10%

After-tax WACC	7.9%	10.6%


Selected WACC	9.3%

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 (9.65%) = risk_free_rate (2.95%) + equity_risk_premium (6.20%) * adjusted_beta (0.98) + 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.