ELTK WACC - Weighted Average Cost of Capital
The WACC of Eltek Ltd (ELTK) is 6.4%.
| Range | Selected | |
| Cost of equity | 5.0% - 12.2% | 8.6% |
| Tax rate | 17.1% - 17.3% | 17.2% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 4.6% - 8.2% | 6.4% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.24 | 1.31 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.0% | 12.2% |
| Tax rate | 17.1% | 17.3% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 4.6% | 8.2% |
| Selected WACC | 6.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| ELTK | Eltek Ltd | 0.84 | 0.14 | 0.08 |
| APH | Amphenol Corp | 0.07 | 1.75 | 1.66 |
| CVAT | Cavitation Technologies Inc | 0.02 | -0.74 | -0.73 |
| DYSL | Dynasil Corporation of America | 0.21 | 0.01 | 0.01 |
| FLXT | Flexpoint Sensor Systems Inc | 7.55 | -1.72 | -0.24 |
| GLW | Corning Inc | 0.18 | 1.38 | 1.19 |
| INRD | Inrad Optics Inc | 0.15 | -0.59 | -0.53 |
| MPAD | Micropac Industries Inc | 0.31 | 0.68 | 0.54 |
| VSH | Vishay Intertechnology Inc | 0.44 | 1.66 | 1.22 |
| YNV.V | Ynvisible Interactive Inc | 0.01 | 1.66 | 1.64 |
| ZTE.CN | Ztest Electronics Inc | 0.05 | -0.2 | -0.19 |
| Low | High | |
| Unlevered beta | 0.01 | 0.54 |
| Relevered beta | -0.13 | 1.46 |
| Adjusted relevered beta | 0.24 | 1.31 |
ELTK'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 ELTK:
cost_of_equity (8.60%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.24) + 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.