The WACC of ICBC Turkey Bank AS (ICBCT.IS) is 11.6%.
| Range | Selected | |
| Cost of equity | 29.40% - 31.80% | 30.60% |
| Tax rate | 31.60% - 35.50% | 33.55% |
| Cost of debt | 5.00% - 5.00% | 5.00% |
| WACC | 11.4% - 11.9% | 11.6% |
| Category | Low | High |
| Long-term bond rate | 21.4% | 21.9% |
| Equity market risk premium | 10.2% | 11.2% |
| Adjusted beta | 0.79 | 0.84 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 29.40% | 31.80% |
| Tax rate | 31.60% | 35.50% |
| Debt/Equity ratio | 2.28 | 2.28 |
| Cost of debt | 5.00% | 5.00% |
| After-tax WACC | 11.4% | 11.9% |
| Selected WACC | 11.6% | |
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 ICBCT.IS:
cost_of_equity (30.60%) = risk_free_rate (21.65%) + equity_risk_premium (10.70%) * adjusted_beta (0.79) + 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.