PGE.WA WACC - Weighted Average Cost of Capital

The WACC of PGE Polska Grupa Energetyczna SA (PGE.WA) is 10.2%.

The Cost of Equity of PGE Polska Grupa Energetyczna SA (PGE.WA) is 13.65%.

The Cost of Debt of PGE Polska Grupa Energetyczna SA (PGE.WA) is 5.95%.

	Range	Selected
Cost of equity	12.30% - 15.00%	13.65%
Tax rate	18.40% - 19.80%	19.10%
Cost of debt	5.50% - 6.40%	5.95%
WACC	9.3% - 11.1%	10.2%

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	1.08	1.15

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.30%	15.00%

Tax rate	18.40%	19.80%
Debt/Equity ratio	0.65	0.65
Cost of debt	5.50%	6.40%

After-tax WACC	9.3%	11.1%


Selected WACC	10.2%

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 (13.65%) = risk_free_rate (5.75%) + equity_risk_premium (6.80%) * adjusted_beta (1.08) + 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.