The WACC of Garanti Faktoring AS (GARFA.IS) is 9.1%.
| Range | Selected | |
| Cost of equity | 28.20% - 33.10% | 30.65% |
| Tax rate | 19.40% - 21.00% | 20.20% |
| Cost of debt | 5.00% - 5.00% | 5.00% |
| WACC | 8.7% - 9.6% | 9.1% |
| Category | Low | High |
| Long-term bond rate | 21.4% | 21.9% |
| Equity market risk premium | 10.2% | 11.2% |
| Adjusted beta | 0.67 | 0.96 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 28.20% | 33.10% |
| Tax rate | 19.40% | 21.00% |
| Debt/Equity ratio | 4.18 | 4.18 |
| Cost of debt | 5.00% | 5.00% |
| After-tax WACC | 8.7% | 9.6% |
| Selected WACC | 9.1% | |
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 GARFA.IS:
cost_of_equity (30.65%) = risk_free_rate (21.65%) + equity_risk_premium (10.70%) * adjusted_beta (0.67) + 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.