NESTE.HE WACC - Weighted Average Cost of Capital

The WACC of Neste Oyj (NESTE.HE) is 7.7%.

The Cost of Equity of Neste Oyj (NESTE.HE) is 8.60%.

The Cost of Debt of Neste Oyj (NESTE.HE) is 4.95%.

	Range	Selected
Cost of equity	7.10% - 10.10%	8.60%
Tax rate	14.10% - 16.90%	15.50%
Cost of debt	4.00% - 5.90%	4.95%
WACC	6.4% - 9.0%	7.7%

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	0.77	0.95

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.10%	10.10%

Tax rate	14.10%	16.90%
Debt/Equity ratio	0.25	0.25
Cost of debt	4.00%	5.90%

After-tax WACC	6.4%	9.0%


Selected WACC	7.7%

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 (8.60%) = risk_free_rate (2.95%) + equity_risk_premium (6.20%) * adjusted_beta (0.77) + 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.