EMIRATESNBD.DB WACC - Weighted Average Cost of Capital

The WACC of Emirates NBD Bank PJSC (EMIRATESNBD.DB) is 9.3%.

The Cost of Equity of Emirates NBD Bank PJSC (EMIRATESNBD.DB) is 12.50%.

The Cost of Debt of Emirates NBD Bank PJSC (EMIRATESNBD.DB) is 5.00%.

	Range	Selected
Cost of equity	11.20% - 13.80%	12.50%
Tax rate	7.90% - 9.80%	8.85%
Cost of debt	5.00% - 5.00%	5.00%
WACC	8.6% - 10.1%	9.3%

WACC

EMIRATESNBD.DB WACC calculation

Category	Low	High

Long-term bond rate	5.9%	6.4%
Equity market risk premium	5.8%	6.8%
Adjusted beta	0.92	1.01

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.20%	13.80%

Tax rate	7.90%	9.80%
Debt/Equity ratio	0.67	0.67
Cost of debt	5.00%	5.00%

After-tax WACC	8.6%	10.1%


Selected WACC	9.3%

EMIRATESNBD.DB'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 EMIRATESNBD.DB:

cost_of_equity (12.50%) = risk_free_rate (6.15%) + equity_risk_premium (6.30%) * adjusted_beta (0.92) + 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.