OUT1V.HE WACC - Weighted Average Cost of Capital

The WACC of Outokumpu Oyj (OUT1V.HE) is 9.0%.

The Cost of Equity of Outokumpu Oyj (OUT1V.HE) is 9.75%.

The Cost of Debt of Outokumpu Oyj (OUT1V.HE) is 7.80%.

	Range	Selected
Cost of equity	8.60% - 10.90%	9.75%
Tax rate	16.50% - 18.20%	17.35%
Cost of debt	7.00% - 8.60%	7.80%
WACC	8.0% - 10.0%	9.0%

WACC

OUT1V.HE WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	5.7%	6.7%
Adjusted beta	1.03	1.07

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.60%	10.90%

Tax rate	16.50%	18.20%
Debt/Equity ratio	0.29	0.29
Cost of debt	7.00%	8.60%

After-tax WACC	8.0%	10.0%


Selected WACC	9.0%

OUT1V.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 OUT1V.HE:

cost_of_equity (9.75%) = risk_free_rate (2.95%) + equity_risk_premium (6.20%) * adjusted_beta (1.03) + 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.