ROVIO.HE WACC - Weighted Average Cost of Capital

The WACC of Rovio Entertainment Oyj (ROVIO.HE) is 8.1%.

The Cost of Equity of Rovio Entertainment Oyj (ROVIO.HE) is 8.10%.

The Cost of Debt of Rovio Entertainment Oyj (ROVIO.HE) is 8.60%.

	Range	Selected
Cost of equity	6.60% - 9.60%	8.10%
Tax rate	24.60% - 25.10%	24.85%
Cost of debt	4.00% - 13.20%	8.60%
WACC	6.6% - 9.6%	8.1%

WACC

ROVIO.HE WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	5.7%	6.7%
Adjusted beta	0.69	0.88

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.60%	9.60%

Tax rate	24.60%	25.10%
Debt/Equity ratio	0.01	0.01
Cost of debt	4.00%	13.20%

After-tax WACC	6.6%	9.6%


Selected WACC	8.1%

ROVIO.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 ROVIO.HE:

cost_of_equity (8.10%) = risk_free_rate (2.95%) + equity_risk_premium (6.20%) * adjusted_beta (0.69) + 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.