PETKM.IS WACC - Weighted Average Cost of Capital

The WACC of Petkim Petrokimya Holding AS (PETKM.IS) is 22.9%.

The Cost of Equity of Petkim Petrokimya Holding AS (PETKM.IS) is 30.05%.

The Cost of Debt of Petkim Petrokimya Holding AS (PETKM.IS) is 14.05%.

	Range	Selected
Cost of equity	27.40% - 32.70%	30.05%
Tax rate	13.70% - 16.00%	14.85%
Cost of debt	5.60% - 22.50%	14.05%
WACC	18.5% - 27.3%	22.9%

WACC

PETKM.IS WACC calculation

Category	Low	High

Long-term bond rate	21.4%	21.9%
Equity market risk premium	10.2%	11.2%
Adjusted beta	0.59	0.93

Additional risk adjustments	0.0%	0.5%
Cost of equity	27.40%	32.70%

Tax rate	13.70%	16.00%
Debt/Equity ratio	0.65	0.65
Cost of debt	5.60%	22.50%

After-tax WACC	18.5%	27.3%


Selected WACC	22.9%

PETKM.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 PETKM.IS:

cost_of_equity (30.05%) = risk_free_rate (21.65%) + equity_risk_premium (10.70%) * adjusted_beta (0.59) + 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.