KNEBV.HE WACC - Weighted Average Cost of Capital

The WACC of Kone Oyj (KNEBV.HE) is 9.1%.

The Cost of Equity of Kone Oyj (KNEBV.HE) is 9.30%.

The Cost of Debt of Kone Oyj (KNEBV.HE) is 4.25%.

	Range	Selected
Cost of equity	7.80% - 10.80%	9.30%
Tax rate	23.10% - 23.50%	23.30%
Cost of debt	4.00% - 4.50%	4.25%
WACC	7.7% - 10.5%	9.1%

WACC

KNEBV.HE WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	5.7%	6.7%
Adjusted beta	0.9	1.05

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.80%	10.80%

Tax rate	23.10%	23.50%
Debt/Equity ratio	0.04	0.04
Cost of debt	4.00%	4.50%

After-tax WACC	7.7%	10.5%


Selected WACC	9.1%

KNEBV.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 KNEBV.HE:

cost_of_equity (9.30%) = risk_free_rate (2.95%) + equity_risk_premium (6.20%) * adjusted_beta (0.9) + 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.