NESTE.HE WACC - Weighted Average Cost of Capital

The WACC of Neste Oyj (NESTE.HE) is 9.4%.

The Cost of Equity of Neste Oyj (NESTE.HE) is 7.65%.

The Cost of Debt of Neste Oyj (NESTE.HE) is 13.35%.

	Range	Selected
Cost of equity	5.90% - 9.40%	7.65%
Tax rate	9.80% - 12.70%	11.25%
Cost of debt	4.00% - 22.70%	13.35%
WACC	4.9% - 13.8%	9.4%

WACC

NESTE.HE WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	5.7%	6.7%
Adjusted beta	0.55	0.84

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.90%	9.40%

Tax rate	9.80%	12.70%
Debt/Equity ratio	0.74	0.74
Cost of debt	4.00%	22.70%

After-tax WACC	4.9%	13.8%


Selected WACC	9.4%

NESTE.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 NESTE.HE:

cost_of_equity (7.65%) = risk_free_rate (2.95%) + equity_risk_premium (6.20%) * adjusted_beta (0.55) + 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.