PKO.WA WACC - Weighted Average Cost of Capital

The WACC of Powszechna Kasa Oszczednosci Bank Polski SA (PKO.WA) is 9.5%.

The Cost of Equity of Powszechna Kasa Oszczednosci Bank Polski SA (PKO.WA) is 11.40%.

The Cost of Debt of Powszechna Kasa Oszczednosci Bank Polski SA (PKO.WA) is 5.00%.

	Range	Selected
Cost of equity	9.80% - 13.00%	11.40%
Tax rate	29.10% - 32.60%	30.85%
Cost of debt	5.00% - 5.00%	5.00%
WACC	8.3% - 10.7%	9.5%

WACC

PKO.WA WACC calculation

Category	Low	High

Long-term bond rate	5.5%	6.0%
Equity market risk premium	6.3%	7.3%
Adjusted beta	0.68	0.89

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.80%	13.00%

Tax rate	29.10%	32.60%
Debt/Equity ratio	0.32	0.32
Cost of debt	5.00%	5.00%

After-tax WACC	8.3%	10.7%


Selected WACC	9.5%

PKO.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 PKO.WA:

cost_of_equity (11.40%) = risk_free_rate (5.75%) + equity_risk_premium (6.80%) * adjusted_beta (0.68) + 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.