The WACC of Valoe Oyj (VALOE.HE) is 5.4%.
Range | Selected | |
Cost of equity | 7.1% - 15.5% | 11.3% |
Tax rate | 20.0% - 20.0% | 20% |
Cost of debt | 4.0% - 7.0% | 5.5% |
WACC | 3.8% - 7.0% | 5.4% |
Category | Low | High |
Long-term bond rate | 2.7% | 3.2% |
Equity market risk premium | 5.7% | 6.7% |
Adjusted beta | 0.77 | 1.76 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 7.1% | 15.5% |
Tax rate | 20.0% | 20.0% |
Debt/Equity ratio | 5.83 | 5.83 |
Cost of debt | 4.0% | 7.0% |
After-tax WACC | 3.8% | 7.0% |
Selected WACC | 5.4% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
VALOE.HE | Valoe Oyj | 5.83 | 0.42 | 0.07 |
ALTRO.PA | TronicS Microsystems SA | 0.21 | -1.19 | -1.02 |
CYAN.L | Cyanconnode Holdings PLC | 0.02 | 0.64 | 0.63 |
EEMS.MI | EEMS Italia SpA | 0.14 | 0.25 | 0.23 |
MEMS.PA | Memscap SA | 0.16 | 1.63 | 1.44 |
NANO.L | Nanoco Group PLC | 0.1 | 1.2 | 1.11 |
P4O.DE | Plan Optik AG | 0.12 | 0.66 | 0.6 |
SIS.DE | First Sensor AG | 0.01 | -0.13 | -0.13 |
QNC.V | Quantum Numbers Corp | 0 | -0.16 | -0.16 |
SEV.V | Spectra7 Microsystems Inc | 6.93 | 0.94 | 0.14 |
Low | High | |
Unlevered beta | 0.12 | 0.38 |
Relevered beta | 0.66 | 2.13 |
Adjusted relevered beta | 0.77 | 1.76 |
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 VALOE.HE:
cost_of_equity (11.30%) = risk_free_rate (2.95%) + equity_risk_premium (6.20%) * adjusted_beta (0.77) + 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.