ITRN
Ituran Location and Control Ltd
Price:  
39.35 
USD
Volume:  
102,252
Israel | Communications Equipment

ITRN WACC - Weighted Average Cost of Capital

The WACC of Ituran Location and Control Ltd (ITRN) is 9.7%.

The Cost of Equity of Ituran Location and Control Ltd (ITRN) is 9.7%.
The Cost of Debt of Ituran Location and Control Ltd (ITRN) is 4.25%.

RangeSelected
Cost of equity8.4% - 11.0%9.7%
Tax rate22.7% - 24.1%23.4%
Cost of debt4.0% - 4.5%4.25%
WACC8.4% - 11.0%9.7%
WACC

ITRN WACC calculation

CategoryLowHigh
Long-term bond rate3.9%4.4%
Equity market risk premium4.6%5.6%
Adjusted beta0.981.1
Additional risk adjustments0.0%0.5%
Cost of equity8.4%11.0%
Tax rate22.7%24.1%
Debt/Equity ratio
00
Cost of debt4.0%4.5%
After-tax WACC8.4%11.0%
Selected WACC9.7%

ITRN'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 ITRN:

cost_of_equity (9.70%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.98) + 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.