MZTF.TA WACC - Weighted Average Cost of Capital

The WACC of Mizrahi Tefahot Bank Ltd (MZTF.TA) is 7.9%.

The Cost of Equity of Mizrahi Tefahot Bank Ltd (MZTF.TA) is 10.90%.

The Cost of Debt of Mizrahi Tefahot Bank Ltd (MZTF.TA) is 5.00%.

	Range	Selected
Cost of equity	9.40% - 12.40%	10.90%
Tax rate	34.40% - 34.50%	34.45%
Cost of debt	5.00% - 5.00%	5.00%
WACC	7.0% - 8.8%	7.9%

WACC

MZTF.TA WACC calculation

Category	Low	High

Long-term bond rate	4.8%	5.3%
Equity market risk premium	6.1%	7.1%
Adjusted beta	0.74	0.92

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.40%	12.40%

Tax rate	34.40%	34.50%
Debt/Equity ratio	0.63	0.63
Cost of debt	5.00%	5.00%

After-tax WACC	7.0%	8.8%


Selected WACC	7.9%

MZTF.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 MZTF.TA:

cost_of_equity (10.90%) = risk_free_rate (5.05%) + equity_risk_premium (6.60%) * adjusted_beta (0.74) + 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.