The WACC of Pera Gayrimenkul Yatirim Ortakligi AS (PEGYO.IS) is 26.5%.
| Range | Selected | |
| Cost of equity | 25.60% - 28.40% | 27.00% |
| Tax rate | 21.20% - 22.00% | 21.60% |
| Cost of debt | 7.00% - 16.20% | 11.60% |
| WACC | 25.0% - 27.9% | 26.5% |
| Category | Low | High |
| Long-term bond rate | 21.4% | 21.9% |
| Equity market risk premium | 10.2% | 11.2% |
| Adjusted beta | 0.42 | 0.54 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 25.60% | 28.40% |
| Tax rate | 21.20% | 22.00% |
| Debt/Equity ratio | 0.03 | 0.03 |
| Cost of debt | 7.00% | 16.20% |
| After-tax WACC | 25.0% | 27.9% |
| Selected WACC | 26.5% | |
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 PEGYO.IS:
cost_of_equity (27.00%) = risk_free_rate (21.65%) + equity_risk_premium (10.70%) * adjusted_beta (0.42) + 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.