AYAL.TA WACC - Weighted Average Cost of Capital

The WACC of Ayalon Holdings Ltd (AYAL.TA) is 9.2%.

The Cost of Equity of Ayalon Holdings Ltd (AYAL.TA) is 11.50%.

The Cost of Debt of Ayalon Holdings Ltd (AYAL.TA) is 5.00%.

	Range	Selected
Cost of equity	9.10% - 13.90%	11.50%
Tax rate	15.30% - 23.20%	19.25%
Cost of debt	5.00% - 5.00%	5.00%
WACC	7.6% - 10.7%	9.2%

WACC

AYAL.TA WACC calculation

Category	Low	High

Long-term bond rate	4.8%	5.3%
Equity market risk premium	6.1%	7.1%
Adjusted beta	0.69	1.13

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.10%	13.90%

Tax rate	15.30%	23.20%
Debt/Equity ratio	0.46	0.46
Cost of debt	5.00%	5.00%

After-tax WACC	7.6%	10.7%


Selected WACC	9.2%

AYAL.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 AYAL.TA:

cost_of_equity (11.50%) = risk_free_rate (5.05%) + equity_risk_premium (6.60%) * adjusted_beta (0.69) + 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.