SOLTEQ.HE WACC - Weighted Average Cost of Capital

The WACC of Solteq Oyj (SOLTEQ.HE) is 7.0%.

The Cost of Equity of Solteq Oyj (SOLTEQ.HE) is 11.90%.

The Cost of Debt of Solteq Oyj (SOLTEQ.HE) is 7.15%.

	Range	Selected
Cost of equity	9.70% - 14.10%	11.90%
Tax rate	20.20% - 25.10%	22.65%
Cost of debt	7.00% - 7.30%	7.15%
WACC	6.5% - 7.4%	7.0%

WACC

SOLTEQ.HE WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	5.7%	6.7%
Adjusted beta	1.22	1.55

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.70%	14.10%

Tax rate	20.20%	25.10%
Debt/Equity ratio	3.44	3.44
Cost of debt	7.00%	7.30%

After-tax WACC	6.5%	7.4%


Selected WACC	7.0%

SOLTEQ.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 SOLTEQ.HE:

cost_of_equity (11.90%) = risk_free_rate (2.95%) + equity_risk_premium (6.20%) * adjusted_beta (1.22) + 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.