IHLAS.IS WACC - Weighted Average Cost of Capital

The WACC of Ihlas Holding AS (IHLAS.IS) is 26.5%.

The Cost of Equity of Ihlas Holding AS (IHLAS.IS) is 31.35%.

The Cost of Debt of Ihlas Holding AS (IHLAS.IS) is 23.45%.

	Range	Selected
Cost of equity	29.60% - 33.10%	31.35%
Tax rate	21.20% - 22.00%	21.60%
Cost of debt	12.50% - 34.40%	23.45%
WACC	22.3% - 30.8%	26.5%

WACC

IHLAS.IS WACC calculation

Category	Low	High

Long-term bond rate	21.4%	21.9%
Equity market risk premium	10.2%	11.2%
Adjusted beta	0.81	0.96

Additional risk adjustments	0.0%	0.5%
Cost of equity	29.60%	33.10%

Tax rate	21.20%	22.00%
Debt/Equity ratio	0.58	0.58
Cost of debt	12.50%	34.40%

After-tax WACC	22.3%	30.8%


Selected WACC	26.5%

IHLAS.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 IHLAS.IS:

cost_of_equity (31.35%) = risk_free_rate (21.65%) + equity_risk_premium (10.70%) * adjusted_beta (0.81) + 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.