METSB.HE WACC - Weighted Average Cost of Capital

The WACC of Metsa Board Oyj (METSB.HE) is 7.0%.

The Cost of Equity of Metsa Board Oyj (METSB.HE) is 8.05%.

The Cost of Debt of Metsa Board Oyj (METSB.HE) is 5.50%.

	Range	Selected
Cost of equity	7.10% - 9.00%	8.05%
Tax rate	13.30% - 14.90%	14.10%
Cost of debt	4.00% - 7.00%	5.50%
WACC	6.0% - 8.1%	7.0%

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	0.77	0.79

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.10%	9.00%

Tax rate	13.30%	14.90%
Debt/Equity ratio	0.46	0.46
Cost of debt	4.00%	7.00%

After-tax WACC	6.0%	8.1%


Selected WACC	7.0%

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 (8.05%) = risk_free_rate (2.95%) + equity_risk_premium (6.20%) * adjusted_beta (0.77) + 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.