MTN.JO WACC - Weighted Average Cost of Capital

The WACC of MTN Group Ltd (MTN.JO) is 16.0%.

The Cost of Equity of MTN Group Ltd (MTN.JO) is 20.80%.

The Cost of Debt of MTN Group Ltd (MTN.JO) is 11.55%.

	Range	Selected
Cost of equity	19.70% - 21.90%	20.80%
Tax rate	27.60% - 28.00%	27.80%
Cost of debt	10.40% - 12.70%	11.55%
WACC	15.0% - 16.9%	16.0%

WACC

MTN.JO WACC calculation

Category	Low	High

Long-term bond rate	9.1%	9.6%
Equity market risk premium	9.5%	10.5%
Adjusted beta	1.11	1.12

Additional risk adjustments	0.0%	0.5%
Cost of equity	19.70%	21.90%

Tax rate	27.60%	28.00%
Debt/Equity ratio	0.63	0.63
Cost of debt	10.40%	12.70%

After-tax WACC	15.0%	16.9%


Selected WACC	16.0%

MTN.JO'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 MTN.JO:

cost_of_equity (20.80%) = risk_free_rate (9.35%) + equity_risk_premium (10.00%) * adjusted_beta (1.11) + 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.