The WACC of Parsan Makina Parcalari Sanayii AS (PARSN.IS) is 23.0%.
| Range | Selected | |
| Cost of equity | 28.30% - 33.40% | 30.85% |
| Tax rate | 31.20% - 36.30% | 33.75% |
| Cost of debt | 4.60% - 25.40% | 15.00% |
| WACC | 18.9% - 27.0% | 23.0% |
| Category | Low | High |
| Long-term bond rate | 21.4% | 21.9% |
| Equity market risk premium | 10.2% | 11.2% |
| Adjusted beta | 0.68 | 0.99 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 28.30% | 33.40% |
| Tax rate | 31.20% | 36.30% |
| Debt/Equity ratio | 0.59 | 0.59 |
| Cost of debt | 4.60% | 25.40% |
| After-tax WACC | 18.9% | 27.0% |
| Selected WACC | 23.0% | |
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 PARSN.IS:
cost_of_equity (30.85%) = risk_free_rate (21.65%) + equity_risk_premium (10.70%) * adjusted_beta (0.68) + 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.