MOCORP.HE WACC - Weighted Average Cost of Capital

The WACC of Metso Outotec Corp (MOCORP.HE) is 6.6%.

The Cost of Equity of Metso Outotec Corp (MOCORP.HE) is 6.85%.

The Cost of Debt of Metso Outotec Corp (MOCORP.HE) is 6.50%.

	Range	Selected
Cost of equity	5.10% - 8.60%	6.85%
Tax rate	17.80% - 23.70%	20.75%
Cost of debt	4.00% - 9.00%	6.50%
WACC	4.9% - 8.3%	6.6%

WACC

MOCORP.HE WACC calculation

Category	Low	High

Long-term bond rate	0.3%	0.8%
Equity market risk premium	5.6%	6.6%
Adjusted beta	0.87	1.1

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.10%	8.60%

Tax rate	17.80%	23.70%
Debt/Equity ratio	0.18	0.18
Cost of debt	4.00%	9.00%

After-tax WACC	4.9%	8.3%


Selected WACC	6.6%

MOCORP.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 MOCORP.HE:

cost_of_equity (6.85%) = risk_free_rate (0.55%) + equity_risk_premium (6.10%) * adjusted_beta (0.87) + 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.