KRDMD.IS WACC - Weighted Average Cost of Capital

The WACC of Kardemir Karabuk Demir Celik Sanayi ve Ticaret AS (KRDMD.IS) is 27.0%.

The Cost of Equity of Kardemir Karabuk Demir Celik Sanayi ve Ticaret AS (KRDMD.IS) is 29.75%.

The Cost of Debt of Kardemir Karabuk Demir Celik Sanayi ve Ticaret AS (KRDMD.IS) is 14.80%.

	Range	Selected
Cost of equity	26.50% - 33.00%	29.75%
Tax rate	22.60% - 30.50%	26.55%
Cost of debt	7.60% - 22.00%	14.80%
WACC	23.6% - 30.4%	27.0%

WACC

KRDMD.IS WACC calculation

Category	Low	High

Long-term bond rate	21.4%	21.9%
Equity market risk premium	10.2%	11.2%
Adjusted beta	0.51	0.95

Additional risk adjustments	0.0%	0.5%
Cost of equity	26.50%	33.00%

Tax rate	22.60%	30.50%
Debt/Equity ratio	0.17	0.17
Cost of debt	7.60%	22.00%

After-tax WACC	23.6%	30.4%


Selected WACC	27.0%

KRDMD.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 KRDMD.IS:

cost_of_equity (29.75%) = risk_free_rate (21.65%) + equity_risk_premium (10.70%) * adjusted_beta (0.51) + 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.