AFRE.TA
Africa Israel Residences Ltd
Price:  
28,200.00 
ILS
Volume:  
10,166.00
Israel | Real Estate Management & Development
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AFRE.TA WACC - Weighted Average Cost of Capital

The WACC of Africa Israel Residences Ltd (AFRE.TA) is 8.0%.

The Cost of Equity of Africa Israel Residences Ltd (AFRE.TA) is 9.35%.
The Cost of Debt of Africa Israel Residences Ltd (AFRE.TA) is 6.00%.

Range Selected
Cost of equity 8.40% - 10.30% 9.35%
Tax rate 18.70% - 20.20% 19.45%
Cost of debt 4.00% - 8.00% 6.00%
WACC 6.9% - 9.2% 8.0%
WACC

AFRE.TA WACC calculation

Category Low High
Long-term bond rate 4.8% 5.3%
Equity market risk premium 6.1% 7.1%
Adjusted beta 0.59 0.63
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.40% 10.30%
Tax rate 18.70% 20.20%
Debt/Equity ratio 0.42 0.42
Cost of debt 4.00% 8.00%
After-tax WACC 6.9% 9.2%
Selected WACC 8.0%

AFRE.TA'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 AFRE.TA:

cost_of_equity (9.35%) = risk_free_rate (5.05%) + equity_risk_premium (6.60%) * adjusted_beta (0.59) + 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.