MOCORP.HE
Metso Outotec Corp
Price:  
10.89 
Metso Outotec Oyj
Volume:  
1,531,460
Finland | Machinery

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 6.5%.

RangeSelected
Cost of equity5.1% - 8.6%6.85%
Tax rate17.8% - 23.7%20.75%
Cost of debt4.0% - 9.0%6.5%
WACC4.9% - 8.3%6.6%
WACC

MOCORP.HE WACC calculation

CategoryLowHigh
Long-term bond rate0.3%0.8%
Equity market risk premium5.6%6.6%
Adjusted beta0.871.1
Additional risk adjustments0.0%0.5%
Cost of equity5.1%8.6%
Tax rate17.8%23.7%
Debt/Equity ratio
0.180.18
Cost of debt4.0%9.0%
After-tax WACC4.9%8.3%
Selected WACC6.6%

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.