MZTF.TA
Mizrahi Tefahot Bank Ltd
Price:  
22,700.00 
ILS
Volume:  
715,779.00
Israel | Banks
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MZTF.TA WACC - Weighted Average Cost of Capital

The WACC of Mizrahi Tefahot Bank Ltd (MZTF.TA) is 7.2%.

The Cost of Equity of Mizrahi Tefahot Bank Ltd (MZTF.TA) is 9.75%.
The Cost of Debt of Mizrahi Tefahot Bank Ltd (MZTF.TA) is 5.00%.

Range Selected
Cost of equity 8.60% - 10.90% 9.75%
Tax rate 34.40% - 34.50% 34.45%
Cost of debt 5.00% - 5.00% 5.00%
WACC 6.5% - 7.9% 7.2%
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 0.62 0.71
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.60% 10.90%
Tax rate 34.40% 34.50%
Debt/Equity ratio 0.66 0.66
Cost of debt 5.00% 5.00%
After-tax WACC 6.5% 7.9%
Selected WACC 7.2%

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 (9.75%) = risk_free_rate (5.05%) + equity_risk_premium (6.60%) * 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.