HOD.TA WACC - Weighted Average Cost of Capital

The WACC of Hod Assaf Industries Ltd (HOD.TA) is 8.8%.

The Cost of Equity of Hod Assaf Industries Ltd (HOD.TA) is 11.50%.

The Cost of Debt of Hod Assaf Industries Ltd (HOD.TA) is 4.90%.

	Range	Selected
Cost of equity	9.60% - 13.40%	11.50%
Tax rate	24.80% - 26.60%	25.70%
Cost of debt	4.00% - 5.80%	4.90%
WACC	7.3% - 10.2%	8.8%

WACC

HOD.TA WACC calculation

Category	Low	High

Long-term bond rate	4.8%	5.3%
Equity market risk premium	6.1%	7.1%
Adjusted beta	0.77	1.07

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.60%	13.40%

Tax rate	24.80%	26.60%
Debt/Equity ratio	0.53	0.53
Cost of debt	4.00%	5.80%

After-tax WACC	7.3%	10.2%


Selected WACC	8.8%

HOD.TA'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 HOD.TA:

cost_of_equity (11.50%) = risk_free_rate (5.05%) + equity_risk_premium (6.60%) * adjusted_beta (0.77) + 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.