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 9.45%.

The Cost of Debt of Africa Israel Residences Ltd (AFRE.TA) is 6.20%.

	Range	Selected
Cost of equity	8.30% - 10.60%	9.45%
Tax rate	18.70% - 20.20%	19.45%
Cost of debt	4.00% - 8.40%	6.20%
WACC	6.6% - 9.3%	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	0.56	0.67

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.30%	10.60%

Tax rate	18.70%	20.20%
Debt/Equity ratio	0.49	0.49
Cost of debt	4.00%	8.40%

After-tax WACC	6.6%	9.3%


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 (9.45%) = risk_free_rate (5.05%) + equity_risk_premium (6.60%) * adjusted_beta (0.56) + 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.