PKN.WA
Polski Koncern Naftowy Orlen SA
Price:  
84.49 
PLN
Volume:  
1,422,472
Poland | Oil, Gas & Consumable Fuels

PKN.WA WACC - Weighted Average Cost of Capital

The WACC of Polski Koncern Naftowy Orlen SA (PKN.WA) is 9.7%.

The Cost of Equity of Polski Koncern Naftowy Orlen SA (PKN.WA) is 11.35%.
The Cost of Debt of Polski Koncern Naftowy Orlen SA (PKN.WA) is 5.5%.

RangeSelected
Cost of equity10.3% - 12.4%11.35%
Tax rate17.6% - 23.5%20.55%
Cost of debt4.0% - 7.0%5.5%
WACC8.7% - 10.8%9.7%
WACC

PKN.WA WACC calculation

CategoryLowHigh
Long-term bond rate5.5%6.0%
Equity market risk premium6.3%7.3%
Adjusted beta0.760.81
Additional risk adjustments0.0%0.5%
Cost of equity10.3%12.4%
Tax rate17.6%23.5%
Debt/Equity ratio
0.30.3
Cost of debt4.0%7.0%
After-tax WACC8.7%10.8%
Selected WACC9.7%

PKN.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 PKN.WA:

cost_of_equity (11.35%) = risk_free_rate (5.75%) + equity_risk_premium (6.80%) * adjusted_beta (0.76) + 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.