The WACC of Polski Koncern Naftowy Orlen SA (PKN.WA) is 9.7%.
Range | Selected | |
Cost of equity | 10.3% - 12.4% | 11.35% |
Tax rate | 17.6% - 23.5% | 20.55% |
Cost of debt | 4.0% - 7.0% | 5.5% |
WACC | 8.7% - 10.8% | 9.7% |
Category | Low | High |
Long-term bond rate | 5.5% | 6.0% |
Equity market risk premium | 6.3% | 7.3% |
Adjusted beta | 0.76 | 0.81 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 10.3% | 12.4% |
Tax rate | 17.6% | 23.5% |
Debt/Equity ratio | 0.3 | 0.3 |
Cost of debt | 4.0% | 7.0% |
After-tax WACC | 8.7% | 10.8% |
Selected WACC | 9.7% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
PKN.WA | Polski Koncern Naftowy Orlen SA | 0.3 | 0.74 | 0.6 |
CE2.DE | CropEnergies AG | 0.02 | 0.01 | 0.01 |
ELPE.AT | Hellenic Petroleum SA | 1.12 | 0.57 | 0.3 |
ES.PA | Esso Societe Anonyme Francaise SA | 0.01 | 0.51 | 0.51 |
LTS.WA | Grupa Lotos SA | 0.22 | 1.12 | 0.95 |
MOH.AT | Motor Oil Hellas Corinth Refineries SA | 1.03 | 1.01 | 0.55 |
OMV.VI | OMV AG | 0.62 | 1.34 | 0.89 |
SRS.MI | Saras SpA | 0.3 | 0.35 | 0.28 |
TUPRS.IS | Turkiye Petrol Rafinerileri AS | 0.92 | 0.9 | 0.51 |
VBK.DE | Verbio Vereinigte Bioenergie AG | 0.24 | 1.67 | 1.4 |
Low | High | |
Unlevered beta | 0.51 | 0.57 |
Relevered beta | 0.64 | 0.72 |
Adjusted relevered beta | 0.76 | 0.81 |
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.