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 11.55%.

The Cost of Debt of Polski Koncern Naftowy Orlen SA (PKN.WA) is 5.05%.

	Range	Selected
Cost of equity	10.50% - 12.60%	11.55%
Tax rate	17.60% - 23.50%	20.55%
Cost of debt	4.00% - 6.10%	5.05%
WACC	8.8% - 10.7%	9.7%

WACC

PKN.WA WACC calculation

Category	Low	High

Long-term bond rate	5.5%	6.0%
Equity market risk premium	6.3%	7.3%
Adjusted beta	0.79	0.82

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.50%	12.60%

Tax rate	17.60%	23.50%
Debt/Equity ratio	0.31	0.31
Cost of debt	4.00%	6.10%

After-tax WACC	8.8%	10.7%


Selected WACC	9.7%

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 (11.55%) = risk_free_rate (5.75%) + equity_risk_premium (6.80%) * adjusted_beta (0.79) + 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.