The Estonian competition authority has released a new version of its guidelines for calculating the weighted average cost of capital (WACC), effective from July 1. While the content and structure remain largely unchanged from the previous version, the updates are necessary to reflect current data and clarifications from the Bank of Estonia's publications.

The new guidelines establish lower WACC rates for various regulated sectors, specifically reducing them by 0.70 to 0.89 percentage points. WACC serves as a benchmark for the reasonable profit margin that regulated service providers can expect, calculated as the product of WACC and the net book value of regulated fixed assets.

This decision to implement the new guidelines is a discretionary choice by the authority, and the previous guidelines, confirmed by the director of the competition authority on July 19, 2023, are now rendered invalid.

For those interested, the new guidelines can be accessed through the provided link.