The WACC of Koc Holding AS (KCHOL.IS) is 20.9%.
| Range | Selected | |
| Cost of equity | 32.50% - 36.40% | 34.45% |
| Tax rate | 5.30% - 7.50% | 6.40% |
| Cost of debt | 8.50% - 22.70% | 15.60% |
| WACC | 15.9% - 25.9% | 20.9% |
| Category | Low | High |
| Long-term bond rate | 21.4% | 21.9% |
| Equity market risk premium | 10.2% | 11.2% |
| Adjusted beta | 1.09 | 1.26 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 32.50% | 36.40% |
| Tax rate | 5.30% | 7.50% |
| Debt/Equity ratio | 2.11 | 2.11 |
| Cost of debt | 8.50% | 22.70% |
| After-tax WACC | 15.9% | 25.9% |
| Selected WACC | 20.9% | |
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 KCHOL.IS:
cost_of_equity (34.45%) = risk_free_rate (21.65%) + equity_risk_premium (10.70%) * adjusted_beta (1.09) + 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.