PIIPPO.HE
Piippo Oyj
Price:  
1.71 
EUR
Volume:  
370.00
Finland | Textiles, Apparel & Luxury Goods
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PIIPPO.HE WACC - Weighted Average Cost of Capital

The WACC of Piippo Oyj (PIIPPO.HE) is 5.9%.

The Cost of Equity of Piippo Oyj (PIIPPO.HE) is 10.35%.
The Cost of Debt of Piippo Oyj (PIIPPO.HE) is 5.00%.

Range Selected
Cost of equity 6.80% - 13.90% 10.35%
Tax rate 12.70% - 19.00% 15.85%
Cost of debt 5.00% - 5.00% 5.00%
WACC 5.0% - 6.8% 5.9%
WACC

PIIPPO.HE WACC calculation

Category Low High
Long-term bond rate 2.7% 3.2%
Equity market risk premium 5.7% 6.7%
Adjusted beta 0.71 1.52
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.80% 13.90%
Tax rate 12.70% 19.00%
Debt/Equity ratio 2.62 2.62
Cost of debt 5.00% 5.00%
After-tax WACC 5.0% 6.8%
Selected WACC 5.9%

PIIPPO.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 PIIPPO.HE:

cost_of_equity (10.35%) = risk_free_rate (2.95%) + equity_risk_premium (6.20%) * adjusted_beta (0.71) + 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.