The WACC of Knafaim Holdings Ltd (KNFM.TA) is 8.0%.
| Range | Selected | |
| Cost of equity | 8.00% - 9.90% | 8.95% |
| Tax rate | 15.80% - 22.80% | 19.30% |
| Cost of debt | 5.00% - 5.00% | 5.00% |
| WACC | 7.3% - 8.8% | 8.0% |
| Category | Low | High |
| Long-term bond rate | 4.8% | 5.3% |
| Equity market risk premium | 5.6% | 6.6% |
| Adjusted beta | 0.57 | 0.62 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.00% | 9.90% |
| Tax rate | 15.80% | 22.80% |
| Debt/Equity ratio | 0.24 | 0.24 |
| Cost of debt | 5.00% | 5.00% |
| After-tax WACC | 7.3% | 8.8% |
| Selected WACC | 8.0% | |
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 KNFM.TA:
cost_of_equity (8.95%) = risk_free_rate (5.05%) + equity_risk_premium (6.10%) * adjusted_beta (0.57) + 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.