YIT.HE WACC - Weighted Average Cost of Capital

The WACC of Yit Oyj (YIT.HE) is 10.2%.

The Cost of Equity of Yit Oyj (YIT.HE) is 9.95%.

The Cost of Debt of Yit Oyj (YIT.HE) is 13.05%.

	Range	Selected
Cost of equity	7.90% - 12.00%	9.95%
Tax rate	20.00% - 20.00%	20.00%
Cost of debt	6.40% - 19.70%	13.05%
WACC	6.3% - 14.1%	10.2%

WACC

YIT.HE WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	5.7%	6.7%
Adjusted beta	0.92	1.24

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.90%	12.00%

Tax rate	20.00%	20.00%
Debt/Equity ratio	1.3	1.3
Cost of debt	6.40%	19.70%

After-tax WACC	6.3%	14.1%


Selected WACC	10.2%

YIT.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 YIT.HE:

cost_of_equity (9.95%) = risk_free_rate (2.95%) + equity_risk_premium (6.20%) * adjusted_beta (0.92) + 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.