ELTK
Eltek Ltd
Price:  
8.90 
USD
Volume:  
30,788.00
Israel | Electronic Equipment, Instruments & Components
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ELTK WACC - Weighted Average Cost of Capital

The WACC of Eltek Ltd (ELTK) is 6.5%.

The Cost of Equity of Eltek Ltd (ELTK) is 8.85%.
The Cost of Debt of Eltek Ltd (ELTK) is 5.00%.

Range Selected
Cost of equity 4.90% - 12.80% 8.85%
Tax rate 17.10% - 17.30% 17.20%
Cost of debt 5.00% - 5.00% 5.00%
WACC 4.5% - 8.5% 6.5%
WACC

ELTK WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.21 1.41
Additional risk adjustments 0.0% 0.5%
Cost of equity 4.90% 12.80%
Tax rate 17.10% 17.30%
Debt/Equity ratio 1 1
Cost of debt 5.00% 5.00%
After-tax WACC 4.5% 8.5%
Selected WACC 6.5%

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 (8.85%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.21) + 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.