LEHTO.HE WACC - Weighted Average Cost of Capital

The WACC of Lehto Group Oyj (LEHTO.HE) is 5.4%.

The Cost of Equity of Lehto Group Oyj (LEHTO.HE) is 30.65%.

The Cost of Debt of Lehto Group Oyj (LEHTO.HE) is 5.75%.

	Range	Selected
Cost of equity	20.60% - 40.70%	30.65%
Tax rate	14.40% - 24.50%	19.45%
Cost of debt	4.50% - 7.00%	5.75%
WACC	4.4% - 6.5%	5.4%

WACC

LEHTO.HE WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	5.7%	6.7%
Adjusted beta	3.14	5.53

Additional risk adjustments	0.0%	0.5%
Cost of equity	20.60%	40.70%

Tax rate	14.40%	24.50%
Debt/Equity ratio	28.99	28.99
Cost of debt	4.50%	7.00%

After-tax WACC	4.4%	6.5%


Selected WACC	5.4%

LEHTO.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 LEHTO.HE:

cost_of_equity (30.65%) = risk_free_rate (2.95%) + equity_risk_premium (6.20%) * adjusted_beta (3.14) + 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.