The WACC of Permanent TSB Group Holdings PLC (IL0A.IR) is 8.6%.
| Range | Selected | |
| Cost of equity | 10.20% - 13.40% | 11.80% |
| Tax rate | 4.30% - 7.10% | 5.70% |
| Cost of debt | 5.00% - 5.00% | 5.00% |
| WACC | 7.8% - 9.5% | 8.6% |
| Category | Low | High |
| Long-term bond rate | 3.0% | 3.5% |
| Equity market risk premium | 6.4% | 7.4% |
| Adjusted beta | 1.13 | 1.28 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 10.20% | 13.40% |
| Tax rate | 4.30% | 7.10% |
| Debt/Equity ratio | 0.81 | 0.81 |
| Cost of debt | 5.00% | 5.00% |
| After-tax WACC | 7.8% | 9.5% |
| Selected WACC | 8.6% | |
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 IL0A.IR:
cost_of_equity (11.80%) = risk_free_rate (3.25%) + equity_risk_premium (6.90%) * adjusted_beta (1.13) + 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.