MGROS.IS WACC - Weighted Average Cost of Capital

The WACC of Migros Ticaret AS (MGROS.IS) is 25.8%.

The Cost of Equity of Migros Ticaret AS (MGROS.IS) is 29.35%.

The Cost of Debt of Migros Ticaret AS (MGROS.IS) is 27.95%.

	Range	Selected
Cost of equity	27.70% - 31.00%	29.35%
Tax rate	18.40% - 23.00%	20.70%
Cost of debt	21.50% - 34.40%	27.95%
WACC	22.8% - 28.9%	25.8%

WACC

MGROS.IS WACC calculation

Category	Low	High

Long-term bond rate	21.4%	21.9%
Equity market risk premium	10.2%	11.2%
Adjusted beta	0.62	0.78

Additional risk adjustments	0.0%	0.5%
Cost of equity	27.70%	31.00%

Tax rate	18.40%	23.00%
Debt/Equity ratio	0.94	0.94
Cost of debt	21.50%	34.40%

After-tax WACC	22.8%	28.9%


Selected WACC	25.8%

MGROS.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 MGROS.IS:

cost_of_equity (29.35%) = risk_free_rate (21.65%) + equity_risk_premium (10.70%) * adjusted_beta (0.62) + 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.