ERBOS.IS WACC - Weighted Average Cost of Capital

The WACC of Erbosan Erciyas Boru Sanayii Ve Ticaret AS (ERBOS.IS) is 28.5%.

The Cost of Equity of Erbosan Erciyas Boru Sanayii Ve Ticaret AS (ERBOS.IS) is 29.65%.

The Cost of Debt of Erbosan Erciyas Boru Sanayii Ve Ticaret AS (ERBOS.IS) is 5.50%.

	Range	Selected
Cost of equity	27.70% - 31.60%	29.65%
Tax rate	16.40% - 17.20%	16.80%
Cost of debt	4.00% - 7.00%	5.50%
WACC	26.5% - 30.4%	28.5%

WACC

ERBOS.IS WACC calculation

Category	Low	High

Long-term bond rate	21.4%	21.9%
Equity market risk premium	10.2%	11.2%
Adjusted beta	0.62	0.83

Additional risk adjustments	0.0%	0.5%
Cost of equity	27.70%	31.60%

Tax rate	16.40%	17.20%
Debt/Equity ratio	0.05	0.05
Cost of debt	4.00%	7.00%

After-tax WACC	26.5%	30.4%


Selected WACC	28.5%

ERBOS.IS'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 ERBOS.IS:

cost_of_equity (29.65%) = risk_free_rate (21.65%) + equity_risk_premium (10.70%) * adjusted_beta (0.62) + 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.