NELES.HE WACC - Weighted Average Cost of Capital

The WACC of Neles Oyj (NELES.HE) is 7.4%.

The Cost of Equity of Neles Oyj (NELES.HE) is 7.95%.

The Cost of Debt of Neles Oyj (NELES.HE) is 4.25%.

	Range	Selected
Cost of equity	6.70% - 9.20%	7.95%
Tax rate	24.70% - 27.30%	26.00%
Cost of debt	4.00% - 4.50%	4.25%
WACC	6.3% - 8.6%	7.4%

WACC

NELES.HE WACC calculation

Category	Low	High

Long-term bond rate	0.3%	0.8%
Equity market risk premium	5.6%	6.6%
Adjusted beta	1.14	1.2

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.70%	9.20%

Tax rate	24.70%	27.30%
Debt/Equity ratio	0.11	0.11
Cost of debt	4.00%	4.50%

After-tax WACC	6.3%	8.6%


Selected WACC	7.4%

NELES.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 NELES.HE:

cost_of_equity (7.95%) = risk_free_rate (0.55%) + equity_risk_premium (6.10%) * adjusted_beta (1.14) + 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.