METSB.HE WACC - Weighted Average Cost of Capital

The WACC of Metsa Board Oyj (METSB.HE) is 7.1%.

The Cost of Equity of Metsa Board Oyj (METSB.HE) is 7.40%.

The Cost of Debt of Metsa Board Oyj (METSB.HE) is 7.60%.

	Range	Selected
Cost of equity	6.30% - 8.50%	7.40%
Tax rate	15.20% - 17.50%	16.35%
Cost of debt	4.00% - 11.20%	7.60%
WACC	5.4% - 8.7%	7.1%

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	0.63	0.71

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.30%	8.50%

Tax rate	15.20%	17.50%
Debt/Equity ratio	0.45	0.45
Cost of debt	4.00%	11.20%

After-tax WACC	5.4%	8.7%


Selected WACC	7.1%

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 (7.40%) = risk_free_rate (2.95%) + equity_risk_premium (6.20%) * adjusted_beta (0.63) + 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.