KPN.AS WACC - Weighted Average Cost of Capital

The WACC of Koninklijke KPN NV (KPN.AS) is 5.5%.

The Cost of Equity of Koninklijke KPN NV (KPN.AS) is 6.35%.

The Cost of Debt of Koninklijke KPN NV (KPN.AS) is 4.85%.

	Range	Selected
Cost of equity	5.10% - 7.60%	6.35%
Tax rate	21.60% - 22.20%	21.90%
Cost of debt	4.00% - 5.70%	4.85%
WACC	4.5% - 6.6%	5.5%

WACC

KPN.AS WACC calculation

Category	Low	High

Long-term bond rate	2.6%	3.1%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.49	0.67

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.10%	7.60%

Tax rate	21.60%	22.20%
Debt/Equity ratio	0.45	0.45
Cost of debt	4.00%	5.70%

After-tax WACC	4.5%	6.6%


Selected WACC	5.5%

KPN.AS'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 KPN.AS:

cost_of_equity (6.35%) = risk_free_rate (2.85%) + equity_risk_premium (5.60%) * adjusted_beta (0.49) + 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.