SSH1V.HE WACC - Weighted Average Cost of Capital

The WACC of SSH Communications Security Oyj (SSH1V.HE) is 6.4%.

The Cost of Equity of SSH Communications Security Oyj (SSH1V.HE) is 6.45%.

The Cost of Debt of SSH Communications Security Oyj (SSH1V.HE) is 5.50%.

	Range	Selected
Cost of equity	5.30% - 7.60%	6.45%
Tax rate	11.70% - 19.30%	15.50%
Cost of debt	4.00% - 7.00%	5.50%
WACC	5.3% - 7.6%	6.4%

WACC

SSH1V.HE WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	5.7%	6.7%
Adjusted beta	0.36	0.5

Additional risk adjustments	0.5%	1.0%
Cost of equity	5.30%	7.60%

Tax rate	11.70%	19.30%
Debt/Equity ratio	0.01	0.01
Cost of debt	4.00%	7.00%

After-tax WACC	5.3%	7.6%


Selected WACC	6.4%

SSH1V.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 SSH1V.HE:

cost_of_equity (6.45%) = risk_free_rate (2.95%) + equity_risk_premium (6.20%) * adjusted_beta (0.36) + risk_adjustments (0.75%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.