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 11.30%.

The Cost of Debt of PGE Polska Grupa Energetyczna SA (PGE.WA) is 5.45%.

	Range	Selected
Cost of equity	10.20% - 12.40%	11.30%
Tax rate	20.10% - 33.70%	26.90%
Cost of debt	4.70% - 6.20%	5.45%
WACC	7.7% - 9.2%	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	0.74	0.8

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.20%	12.40%

Tax rate	20.10%	33.70%
Debt/Equity ratio	0.63	0.63
Cost of debt	4.70%	6.20%

After-tax WACC	7.7%	9.2%


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 (11.30%) = risk_free_rate (5.75%) + equity_risk_premium (6.80%) * adjusted_beta (0.74) + 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.