The WACC of Papilon Savunma-Guvenlik Sistemleri Bilisim Muhendislik Hizmetleri Ithalat Ihracat Sanayi ve Ticaret AS (PAPIL.IS) is 31.2%.
| Range | Selected | |
| Cost of equity | 29.50% - 33.10% | 31.30% |
| Tax rate | 12.00% - 14.00% | 13.00% |
| Cost of debt | 5.00% - 5.00% | 5.00% |
| WACC | 29.4% - 33.0% | 31.2% |
| Category | Low | High |
| Long-term bond rate | 21.4% | 21.9% |
| Equity market risk premium | 10.2% | 11.2% |
| Adjusted beta | 0.8 | 0.96 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 29.50% | 33.10% |
| Tax rate | 12.00% | 14.00% |
| Debt/Equity ratio | 0 | 0 |
| Cost of debt | 5.00% | 5.00% |
| After-tax WACC | 29.4% | 33.0% |
| Selected WACC | 31.2% | |
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 PAPIL.IS:
cost_of_equity (31.30%) = risk_free_rate (21.65%) + equity_risk_premium (10.70%) * adjusted_beta (0.8) + 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.