LUKSK.IS WACC - Weighted Average Cost of Capital

The WACC of Luks Kadife Ticaret ve Sanayi AS (LUKSK.IS) is 26.1%.

The Cost of Equity of Luks Kadife Ticaret ve Sanayi AS (LUKSK.IS) is 28.10%.

The Cost of Debt of Luks Kadife Ticaret ve Sanayi AS (LUKSK.IS) is 13.85%.

	Range	Selected
Cost of equity	25.90% - 30.30%	28.10%
Tax rate	24.60% - 31.00%	27.80%
Cost of debt	4.00% - 23.70%	13.85%
WACC	23.5% - 28.8%	26.1%

WACC

LUKSK.IS WACC calculation

Category	Low	High

Long-term bond rate	21.4%	21.9%
Equity market risk premium	10.2%	11.2%
Adjusted beta	0.45	0.71

Additional risk adjustments	0.0%	0.5%
Cost of equity	25.90%	30.30%

Tax rate	24.60%	31.00%
Debt/Equity ratio	0.12	0.12
Cost of debt	4.00%	23.70%

After-tax WACC	23.5%	28.8%


Selected WACC	26.1%

LUKSK.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 LUKSK.IS:

cost_of_equity (28.10%) = risk_free_rate (21.65%) + equity_risk_premium (10.70%) * adjusted_beta (0.45) + 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.