MERKO.IS WACC - Weighted Average Cost of Capital

The WACC of Merko Gida Sanayi ve Ticaret AS (MERKO.IS) is 26.9%.

The Cost of Equity of Merko Gida Sanayi ve Ticaret AS (MERKO.IS) is 27.60%.

The Cost of Debt of Merko Gida Sanayi ve Ticaret AS (MERKO.IS) is 9.90%.

	Range	Selected
Cost of equity	25.50% - 29.70%	27.60%
Tax rate	12.50% - 14.10%	13.30%
Cost of debt	7.00% - 12.80%	9.90%
WACC	24.7% - 29.0%	26.9%

WACC

MERKO.IS WACC calculation

Category	Low	High

Long-term bond rate	21.4%	21.9%
Equity market risk premium	10.2%	11.2%
Adjusted beta	0.4	0.66

Additional risk adjustments	0.0%	0.5%
Cost of equity	25.50%	29.70%

Tax rate	12.50%	14.10%
Debt/Equity ratio	0.04	0.04
Cost of debt	7.00%	12.80%

After-tax WACC	24.7%	29.0%


Selected WACC	26.9%

MERKO.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 MERKO.IS:

cost_of_equity (27.60%) = risk_free_rate (21.65%) + equity_risk_premium (10.70%) * adjusted_beta (0.4) + 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.