OLVAS.HE WACC - Weighted Average Cost of Capital

The WACC of Olvi Oyj (OLVAS.HE) is 7.1%.

The Cost of Equity of Olvi Oyj (OLVAS.HE) is 7.10%.

The Cost of Debt of Olvi Oyj (OLVAS.HE) is 7.90%.

	Range	Selected
Cost of equity	6.10% - 8.10%	7.10%
Tax rate	23.90% - 26.00%	24.95%
Cost of debt	4.00% - 11.80%	7.90%
WACC	6.1% - 8.1%	7.1%

WACC

OLVAS.HE WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	5.7%	6.7%
Adjusted beta	0.59	0.65

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.10%	8.10%

Tax rate	23.90%	26.00%
Debt/Equity ratio	0.02	0.02
Cost of debt	4.00%	11.80%

After-tax WACC	6.1%	8.1%


Selected WACC	7.1%

OLVAS.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 OLVAS.HE:

cost_of_equity (7.10%) = risk_free_rate (2.95%) + equity_risk_premium (6.20%) * adjusted_beta (0.59) + 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.