SAA1V.HE WACC - Weighted Average Cost of Capital

The WACC of Sanoma Oyj (SAA1V.HE) is 6.2%.

The Cost of Equity of Sanoma Oyj (SAA1V.HE) is 7.15%.

The Cost of Debt of Sanoma Oyj (SAA1V.HE) is 4.25%.

	Range	Selected
Cost of equity	5.80% - 8.50%	7.15%
Tax rate	18.90% - 22.10%	20.50%
Cost of debt	4.00% - 4.50%	4.25%
WACC	5.2% - 7.3%	6.2%

WACC

SAA1V.HE WACC calculation

Category	Low	High

Long-term bond rate	0.3%	0.8%
Equity market risk premium	5.6%	6.6%
Adjusted beta	0.98	1.09

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.80%	8.50%

Tax rate	18.90%	22.10%
Debt/Equity ratio	0.3	0.3
Cost of debt	4.00%	4.50%

After-tax WACC	5.2%	7.3%


Selected WACC	6.2%

SAA1V.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 SAA1V.HE:

cost_of_equity (7.15%) = risk_free_rate (0.55%) + equity_risk_premium (6.10%) * adjusted_beta (0.98) + 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.