PKO.WA WACC - Weighted Average Cost of Capital

The WACC of Powszechna Kasa Oszczednosci Bank Polski SA (PKO.WA) is 10.3%.

The Cost of Equity of Powszechna Kasa Oszczednosci Bank Polski SA (PKO.WA) is 12.05%.

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

	Range	Selected
Cost of equity	10.20% - 13.90%	12.05%
Tax rate	26.20% - 28.30%	27.25%
Cost of debt	5.00% - 5.00%	5.00%
WACC	8.9% - 11.8%	10.3%

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	0.74	1.01

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.20%	13.90%

Tax rate	26.20%	28.30%
Debt/Equity ratio	0.26	0.26
Cost of debt	5.00%	5.00%

After-tax WACC	8.9%	11.8%


Selected WACC	10.3%

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 (12.05%) = risk_free_rate (5.75%) + equity_risk_premium (6.80%) * adjusted_beta (0.74) + 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.