The WACC of Mordechai Aviv Taasiot Beniyah 1973 Ltd (AVIV.TA) is 7.8%.
| Range | Selected | |
| Cost of equity | 15.30% - 19.50% | 17.40% |
| Tax rate | 22.70% - 23.70% | 23.20% |
| Cost of debt | 5.00% - 5.00% | 5.00% |
| WACC | 7.2% - 8.4% | 7.8% |
| Category | Low | High |
| Long-term bond rate | 4.8% | 5.3% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 1.7 | 1.92 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 15.30% | 19.50% |
| Tax rate | 22.70% | 23.70% |
| Debt/Equity ratio | 2.45 | 2.45 |
| Cost of debt | 5.00% | 5.00% |
| After-tax WACC | 7.2% | 8.4% |
| Selected WACC | 7.8% | |
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 AVIV.TA:
cost_of_equity (17.40%) = risk_free_rate (5.05%) + equity_risk_premium (6.60%) * adjusted_beta (1.7) + 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.