PGE.WA
PGE Polska Grupa Energetyczna SA
Price:  
8.84 
PLN
Volume:  
3,160,296.00
Poland | Electric Utilities
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PGE.WA WACC - Weighted Average Cost of Capital

The WACC of PGE Polska Grupa Energetyczna SA (PGE.WA) is 8.5%.

The Cost of Equity of PGE Polska Grupa Energetyczna SA (PGE.WA) is 11.50%.
The Cost of Debt of PGE Polska Grupa Energetyczna SA (PGE.WA) is 5.55%.

Range Selected
Cost of equity 10.40% - 12.60% 11.50%
Tax rate 20.10% - 33.70% 26.90%
Cost of debt 4.70% - 6.40% 5.55%
WACC 7.8% - 9.3% 8.5%
WACC

PGE.WA WACC calculation

Category Low High
Long-term bond rate 5.5% 6.0%
Equity market risk premium 6.3% 7.3%
Adjusted beta 0.78 0.83
Additional risk adjustments 0.0% 0.5%
Cost of equity 10.40% 12.60%
Tax rate 20.10% 33.70%
Debt/Equity ratio 0.67 0.67
Cost of debt 4.70% 6.40%
After-tax WACC 7.8% 9.3%
Selected WACC 8.5%

PGE.WA'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 PGE.WA:

cost_of_equity (11.50%) = risk_free_rate (5.75%) + equity_risk_premium (6.80%) * adjusted_beta (0.78) + 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.