PON1V.HE WACC - Weighted Average Cost of Capital
The WACC of Ponsse Oyj (PON1V.HE) is 7.2%.
| Range | Selected | |
| Cost of equity | 6.0% - 9.2% | 7.6% |
| Tax rate | 24.5% - 28.2% | 26.35% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 5.7% - 8.6% | 7.2% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 5.7% | 6.7% |
| Adjusted beta | 0.58 | 0.82 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.0% | 9.2% |
| Tax rate | 24.5% | 28.2% |
| Debt/Equity ratio | 0.11 | 0.11 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 5.7% | 8.6% |
| Selected WACC | 7.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| PON1V.HE | Ponsse Oyj | 0.11 | 0.51 | 0.48 |
| BCHN.SW | Burckhardt Compression Holding AG | 0.07 | 0.96 | 0.91 |
| BSS.MI | Biesse SpA | 0.98 | 1.1 | 0.64 |
| CNHI.MI | CNH Industrial NV | 1.53 | 1.45 | 0.68 |
| COM.MI | Comer Industries SpA | 0.17 | 0.18 | 0.16 |
| EXE.PA | Exel Industries SA | 0.6 | 0.09 | 0.06 |
| JST.DE | JOST Werke AG | 0.41 | 0.95 | 0.73 |
| KELAS.HE | Kesla Oyj | 1.1 | 0.23 | 0.13 |
| TTRAK.IS | Turk Traktor ve Ziraat Makineleri AS | 0.11 | 1.33 | 1.23 |
| URS.WA | Ursus SA | 18.95 | 0.56 | 0.04 |
| Low | High | |
| Unlevered beta | 0.35 | 0.66 |
| Relevered beta | 0.37 | 0.73 |
| Adjusted relevered beta | 0.58 | 0.82 |
PON1V.HE'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 PON1V.HE:
cost_of_equity (7.60%) = risk_free_rate (2.95%) + equity_risk_premium (6.20%) * adjusted_beta (0.58) + 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.