METSB.HE WACC - Weighted Average Cost of Capital

The WACC of Metsa Board Oyj (METSB.HE) is 6.1%.

The Cost of Equity of Metsa Board Oyj (METSB.HE) is 7.25%.

The Cost of Debt of Metsa Board Oyj (METSB.HE) is 4.25%.

	Range	Selected
Cost of equity	5.80% - 8.70%	7.25%
Tax rate	15.20% - 17.50%	16.35%
Cost of debt	4.00% - 4.50%	4.25%
WACC	5.0% - 7.1%	6.1%

WACC

METSB.HE WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	5.7%	6.7%
Adjusted beta	0.53	0.74

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.80%	8.70%

Tax rate	15.20%	17.50%
Debt/Equity ratio	0.47	0.47
Cost of debt	4.00%	4.50%

After-tax WACC	5.0%	7.1%


Selected WACC	6.1%

METSB.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 METSB.HE:

cost_of_equity (7.25%) = risk_free_rate (2.95%) + equity_risk_premium (6.20%) * adjusted_beta (0.53) + 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.