ALGS.TA WACC - Weighted Average Cost of Capital

The WACC of Alon Gas Energy Development Ltd (ALGS.TA) is 8.7%.

The Cost of Equity of Alon Gas Energy Development Ltd (ALGS.TA) is 9.35%.

The Cost of Debt of Alon Gas Energy Development Ltd (ALGS.TA) is 6.35%.

	Range	Selected
Cost of equity	8.20% - 10.50%	9.35%
Tax rate	14.70% - 17.00%	15.85%
Cost of debt	6.30% - 6.40%	6.35%
WACC	7.8% - 9.7%	8.7%

WACC

ALGS.TA WACC calculation

Category	Low	High

Long-term bond rate	4.8%	5.3%
Equity market risk premium	5.6%	6.6%
Adjusted beta	0.6	0.7

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.20%	10.50%

Tax rate	14.70%	17.00%
Debt/Equity ratio	0.18	0.18
Cost of debt	6.30%	6.40%

After-tax WACC	7.8%	9.7%


Selected WACC	8.7%

ALGS.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 ALGS.TA:

cost_of_equity (9.35%) = risk_free_rate (5.05%) + equity_risk_premium (6.10%) * adjusted_beta (0.6) + 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.