ROTS.TA WACC - Weighted Average Cost of Capital

The WACC of Rotshtein Realestate Ltd (ROTS.TA) is 7.2%.

The Cost of Equity of Rotshtein Realestate Ltd (ROTS.TA) is 8.55%.

The Cost of Debt of Rotshtein Realestate Ltd (ROTS.TA) is 7.00%.

	Range	Selected
Cost of equity	7.30% - 9.80%	8.55%
Tax rate	23.40% - 23.60%	23.50%
Cost of debt	5.60% - 8.40%	7.00%
WACC	6.0% - 8.4%	7.2%

WACC

ROTS.TA WACC calculation

Category	Low	High

Long-term bond rate	4.8%	5.3%
Equity market risk premium	6.1%	7.1%
Adjusted beta	0.4	0.56

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.30%	9.80%

Tax rate	23.40%	23.60%
Debt/Equity ratio	0.72	0.72
Cost of debt	5.60%	8.40%

After-tax WACC	6.0%	8.4%


Selected WACC	7.2%

ROTS.TA'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 ROTS.TA:

cost_of_equity (8.55%) = risk_free_rate (5.05%) + equity_risk_premium (6.60%) * adjusted_beta (0.4) + 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.