VERK.HE WACC - Weighted Average Cost of Capital

The WACC of Verkkokauppa.com Oyj (VERK.HE) is 6.3%.

The Cost of Equity of Verkkokauppa.com Oyj (VERK.HE) is 6.35%.

The Cost of Debt of Verkkokauppa.com Oyj (VERK.HE) is 8.90%.

	Range	Selected
Cost of equity	5.10% - 7.60%	6.35%
Tax rate	23.40% - 32.70%	28.05%
Cost of debt	6.60% - 11.20%	8.90%
WACC	5.1% - 7.6%	6.3%

WACC

VERK.HE WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	5.7%	6.7%
Adjusted beta	0.41	0.57

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.10%	7.60%

Tax rate	23.40%	32.70%
Debt/Equity ratio	0.38	0.38
Cost of debt	6.60%	11.20%

After-tax WACC	5.1%	7.6%


Selected WACC	6.3%

VERK.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 VERK.HE:

cost_of_equity (6.35%) = risk_free_rate (2.95%) + equity_risk_premium (6.20%) * adjusted_beta (0.41) + 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.