PwC Advisory consulted on the expected cost of capital for state-owned enterprises of Estonia

The PwC Estonia Advisory team is appreciative to have participated in a project of determining the expected cost of capital for state-owned enterprises (SOEs). We have made a contribution to the state's capital policy, which, based on the methodology we developed, the Ministry of Finance will use to determine the expected return on equity for state-owned companies. This is essential when making investments and evaluating the success of state-owned enterprises. The previous methodology was from 2014 and was no longer relevant in today's market situation and did not take into account the particularities of state-owned firms.

"We are glad that we have been able to have a say in the development of the methodology for evaluating the state's capital policy, and the new methodology is certainly more up-to-date and more considerate of the changing environment," adds Allar Karu, Senior Manager at PwC Estonia Advisory.

Teet Tender, Allar Karu, Andrea Pärtelpoeg and Anna Krumgolts contributed to the project. We also thank Priit Sander, associate professor of finance at the University of Tartu, for his cooperation. More detailed information and methodology can be found (in Estonian) on the website of the Ministry of Finance.