MGROS.IS WACC - Weighted Average Cost of Capital
The WACC of Migros Ticaret AS (MGROS.IS) is 25.8%.
| Range | Selected | |
| Cost of equity | 27.7% - 31.0% | 29.35% |
| Tax rate | 18.4% - 23.0% | 20.7% |
| Cost of debt | 21.5% - 34.4% | 27.95% |
| WACC | 22.8% - 28.9% | 25.8% |
| 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 | 27.7% | 31.0% |
| Tax rate | 18.4% | 23.0% |
| Debt/Equity ratio | 0.94 | 0.94 |
| Cost of debt | 21.5% | 34.4% |
| After-tax WACC | 22.8% | 28.9% |
| Selected WACC | 25.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| MGROS.IS | Migros Ticaret AS | 0.94 | 1 | 0.57 |
| AD.AS | Koninklijke Ahold Delhaize NV | 0.62 | 0.34 | 0.23 |
| CO.PA | Casino Guichard Perrachon SA | 19.6 | 1.67 | 0.1 |
| COLR.BR | Etablissementen Franz Colruyt NV | 0.22 | -0.71 | -0.6 |
| DNP.WA | Dino Polska SA | 0.02 | 1.11 | 1.1 |
| FIVE.L | X5 Retail Group NV | 2.6 | 0.67 | 0.22 |
| HAW.DE | Hawesko Holding AG | 0.89 | 0.05 | 0.03 |
| SOKM.IS | Sok Marketler Ticaret AS | 0.3 | 0.98 | 0.79 |
| TKM1T.TL | Tallinna Kaubamaja Grupp AS | 0.85 | -0.1 | -0.06 |
| VLGEA | Village Super Market Inc | 0.16 | 0.4 | 0.35 |
| Low | High | |
| Unlevered beta | 0.17 | 0.28 |
| Relevered beta | 0.43 | 0.67 |
| Adjusted relevered beta | 0.62 | 0.78 |
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.