ELAL.TA WACC - Weighted Average Cost of Capital

The WACC of El Al Israel Airlines Ltd (ELAL.TA) is 7.4%.

The Cost of Equity of El Al Israel Airlines Ltd (ELAL.TA) is 8.10%.

The Cost of Debt of El Al Israel Airlines Ltd (ELAL.TA) is 4.95%.

	Range	Selected
Cost of equity	7.20% - 9.00%	8.10%
Tax rate	6.20% - 11.90%	9.05%
Cost of debt	4.10% - 5.80%	4.95%
WACC	6.6% - 8.3%	7.4%

WACC

ELAL.TA WACC calculation

Category	Low	High

Long-term bond rate	4.8%	5.3%
Equity market risk premium	5.6%	6.6%
Adjusted beta	0.42	0.48

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.20%	9.00%

Tax rate	6.20%	11.90%
Debt/Equity ratio	0.22	0.22
Cost of debt	4.10%	5.80%

After-tax WACC	6.6%	8.3%


Selected WACC	7.4%

ELAL.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 ELAL.TA:

cost_of_equity (8.10%) = risk_free_rate (5.05%) + equity_risk_premium (6.10%) * adjusted_beta (0.42) + 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.