PKN.WA WACC - Weighted Average Cost of Capital

The WACC of Polski Koncern Naftowy Orlen SA (PKN.WA) is 9.1%.

The Cost of Equity of Polski Koncern Naftowy Orlen SA (PKN.WA) is 10.85%.

The Cost of Debt of Polski Koncern Naftowy Orlen SA (PKN.WA) is 5.50%.

	Range	Selected
Cost of equity	9.30% - 12.40%	10.85%
Tax rate	17.60% - 23.50%	20.55%
Cost of debt	4.00% - 7.00%	5.50%
WACC	7.7% - 10.5%	9.1%

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	0.6	0.8

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.30%	12.40%

Tax rate	17.60%	23.50%
Debt/Equity ratio	0.35	0.35
Cost of debt	4.00%	7.00%

After-tax WACC	7.7%	10.5%


Selected WACC	9.1%

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 (10.85%) = risk_free_rate (5.75%) + equity_risk_premium (6.80%) * adjusted_beta (0.6) + 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.