The WACC of Metso Outotec Corp (MOCORP.HE) is 6.6%.
Range | Selected | |
Cost of equity | 5.1% - 8.6% | 6.85% |
Tax rate | 17.8% - 23.7% | 20.75% |
Cost of debt | 4.0% - 9.0% | 6.5% |
WACC | 4.9% - 8.3% | 6.6% |
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 | 5.1% | 8.6% |
Tax rate | 17.8% | 23.7% |
Debt/Equity ratio | 0.18 | 0.18 |
Cost of debt | 4.0% | 9.0% |
After-tax WACC | 4.9% | 8.3% |
Selected WACC | 6.6% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
MOCORP.HE | Metso Outotec Corp | 0.18 | 1.7 | 1.51 |
BUCN.SW | Bucher Industries AG | 0.01 | 1.08 | 1.07 |
CAF.MC | Construcciones Y Auxiliar De Ferrocarriles SA | 0.54 | 0.85 | 0.62 |
FCT.MI | Fincantieri SpA | 0.41 | 0.66 | 0.51 |
FDR.MC | Fluidra SA | 0.31 | 0.78 | 0.65 |
FLS.CO | Flsmidth & Co A/S | 0.08 | 0.45 | 0.43 |
MTU.PA | Manitou BF SA | 0.49 | 1.75 | 1.31 |
SRAIL.SW | Stadler Rail AG | 0.43 | 1.02 | 0.79 |
VOS.DE | Vossloh AG | 0.13 | 1.02 | 0.94 |
WAC.DE | Wacker Neuson SE | 0.27 | 1.21 | 1.02 |
Low | High | |
Unlevered beta | 0.73 | 0.97 |
Relevered beta | 0.81 | 1.15 |
Adjusted relevered beta | 0.87 | 1.1 |
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.