NLMK.ME WACC - Weighted Average Cost of Capital

The WACC of Novolipetsk Steel PAO (NLMK.ME) is 10.9%.

The Cost of Equity of Novolipetsk Steel PAO (NLMK.ME) is 22.25%.

The Cost of Debt of Novolipetsk Steel PAO (NLMK.ME) is 10.20%.

	Range	Selected
Cost of equity	20.70% - 23.80%	22.25%
Tax rate	23.90% - 25.70%	24.80%
Cost of debt	4.00% - 16.40%	10.20%
WACC	7.0% - 14.8%	10.9%

WACC

NLMK.ME WACC calculation

Category	Low	High

Long-term bond rate	15.8%	16.3%
Equity market risk premium	11.7%	12.7%
Adjusted beta	0.42	0.55

Additional risk adjustments	0.0%	0.5%
Cost of equity	20.70%	23.80%

Tax rate	23.90%	25.70%
Debt/Equity ratio	3.43	3.43
Cost of debt	4.00%	16.40%

After-tax WACC	7.0%	14.8%


Selected WACC	10.9%

NLMK.ME'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 NLMK.ME:

cost_of_equity (22.25%) = risk_free_rate (16.05%) + equity_risk_premium (12.20%) * adjusted_beta (0.42) + 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.