KESKOB.HE WACC - Weighted Average Cost of Capital

The WACC of Kesko Oyj (KESKOB.HE) is 5.9%.

The Cost of Equity of Kesko Oyj (KESKOB.HE) is 6.95%.

The Cost of Debt of Kesko Oyj (KESKOB.HE) is 4.25%.

	Range	Selected
Cost of equity	5.60% - 8.30%	6.95%
Tax rate	19.70% - 19.80%	19.75%
Cost of debt	4.00% - 4.50%	4.25%
WACC	4.9% - 6.9%	5.9%

WACC

KESKOB.HE WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	5.7%	6.7%
Adjusted beta	0.51	0.68

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.60%	8.30%

Tax rate	19.70%	19.80%
Debt/Equity ratio	0.44	0.44
Cost of debt	4.00%	4.50%

After-tax WACC	4.9%	6.9%


Selected WACC	5.9%

KESKOB.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 KESKOB.HE:

cost_of_equity (6.95%) = risk_free_rate (2.95%) + equity_risk_premium (6.20%) * adjusted_beta (0.51) + 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.