CSTE
Caesarstone Ltd
Price:  
1.78 
USD
Volume:  
182,254.00
Israel | Building Products
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CSTE WACC - Weighted Average Cost of Capital

The WACC of Caesarstone Ltd (CSTE) is 9.5%.

The Cost of Equity of Caesarstone Ltd (CSTE) is 9.85%.
The Cost of Debt of Caesarstone Ltd (CSTE) is 6.05%.

Range Selected
Cost of equity 8.10% - 11.60% 9.85%
Tax rate 7.10% - 15.80% 11.45%
Cost of debt 5.10% - 7.00% 6.05%
WACC 7.8% - 11.1% 9.5%
WACC

CSTE WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.91 1.2
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.10% 11.60%
Tax rate 7.10% 15.80%
Debt/Equity ratio 0.08 0.08
Cost of debt 5.10% 7.00%
After-tax WACC 7.8% 11.1%
Selected WACC 9.5%

CSTE'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 CSTE:

cost_of_equity (9.85%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.91) + 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.