LUMI.TA WACC - Weighted Average Cost of Capital
The WACC of Bank Leumi Le Israel BM (LUMI.TA) is 8.9%.
| Range | Selected | |
| Cost of equity | 10.6% - 13.1% | 11.85% |
| Tax rate | 34.4% - 35.2% | 34.8% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 8.0% - 9.7% | 8.9% |
| Category | Low | High |
| Long-term bond rate | 4.8% | 5.3% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.94 | 1.02 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 10.6% | 13.1% |
| Tax rate | 34.4% | 35.2% |
| Debt/Equity ratio | 0.53 | 0.53 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 8.0% | 9.7% |
| Selected WACC | 8.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| LUMI.TA | Bank Leumi Le Israel BM | 0.53 | 1.12 | 0.83 |
| 5880.TW | Taiwan Cooperative Financial Holding Co Ltd | 0.54 | 0.25 | 0.18 |
| BAY.BK | Bank of Ayudhya PCL | 0.62 | 0.97 | 0.69 |
| BBL.BK | Bangkok Bank PCL | 0.76 | 0.8 | 0.53 |
| BBNI.JK | Bank Negara Indonesia (Persero) Tbk PT | 0.54 | 1.39 | 1.03 |
| DIB.DB | Dubai Islamic Bank PJSC | 0.42 | 0.82 | 0.64 |
| IDBI.NS | IDBI Bank Ltd | 0.2 | 1.44 | 1.27 |
| INDUSINDBK.NS | Indusind Bank Ltd | 0.79 | 1.29 | 0.85 |
| KBANK.BK | Kasikornbank PCL | 0.17 | 0.8 | 0.72 |
| QIBK.QA | Qatar Islamic Bank QPSC | 0.71 | 1.23 | 0.84 |
| SCB.BK | Siam Commercial Bank PCL | 0.27 | 0.36 | 0.3 |
| Low | High | |
| Unlevered beta | 0.69 | 0.83 |
| Relevered beta | 0.91 | 1.03 |
| Adjusted relevered beta | 0.94 | 1.02 |
LUMI.TA'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 LUMI.TA:
cost_of_equity (11.85%) = risk_free_rate (5.05%) + equity_risk_premium (6.60%) * adjusted_beta (0.94) + 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.