VALMT.HE WACC - Weighted Average Cost of Capital

The WACC of Valmet Oyj (VALMT.HE) is 8.9%.

The Cost of Equity of Valmet Oyj (VALMT.HE) is 10.70%.

The Cost of Debt of Valmet Oyj (VALMT.HE) is 4.25%.

	Range	Selected
Cost of equity	9.40% - 12.00%	10.70%
Tax rate	24.30% - 24.70%	24.50%
Cost of debt	4.00% - 4.50%	4.25%
WACC	7.9% - 9.9%	8.9%

WACC

VALMT.HE WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	5.7%	6.7%
Adjusted beta	1.17	1.23

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.40%	12.00%

Tax rate	24.30%	24.70%
Debt/Equity ratio	0.31	0.31
Cost of debt	4.00%	4.50%

After-tax WACC	7.9%	9.9%


Selected WACC	8.9%

VALMT.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 VALMT.HE:

cost_of_equity (10.70%) = risk_free_rate (2.95%) + equity_risk_premium (6.20%) * adjusted_beta (1.17) + 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.