OTKAR.IS WACC - Weighted Average Cost of Capital

The WACC of Otokar Otomotiv ve Savunma Sanayi AS (OTKAR.IS) is 28.1%.

The Cost of Equity of Otokar Otomotiv ve Savunma Sanayi AS (OTKAR.IS) is 29.85%.

The Cost of Debt of Otokar Otomotiv ve Savunma Sanayi AS (OTKAR.IS) is 19.55%.

	Range	Selected
Cost of equity	27.30% - 32.40%	29.85%
Tax rate	2.10% - 5.30%	3.70%
Cost of debt	16.40% - 22.70%	19.55%
WACC	25.5% - 30.7%	28.1%

WACC

OTKAR.IS WACC calculation

Category	Low	High

Long-term bond rate	21.4%	21.9%
Equity market risk premium	10.2%	11.2%
Adjusted beta	0.58	0.89

Additional risk adjustments	0.0%	0.5%
Cost of equity	27.30%	32.40%

Tax rate	2.10%	5.30%
Debt/Equity ratio	0.19	0.19
Cost of debt	16.40%	22.70%

After-tax WACC	25.5%	30.7%


Selected WACC	28.1%

OTKAR.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 OTKAR.IS:

cost_of_equity (29.85%) = risk_free_rate (21.65%) + equity_risk_premium (10.70%) * adjusted_beta (0.58) + 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.