SPEN.TA WACC - Weighted Average Cost of Capital

The WACC of Shapir Engineering and Industry Ltd (SPEN.TA) is 8.0%.

The Cost of Equity of Shapir Engineering and Industry Ltd (SPEN.TA) is 10.20%.

The Cost of Debt of Shapir Engineering and Industry Ltd (SPEN.TA) is 7.25%.

	Range	Selected
Cost of equity	8.90% - 11.50%	10.20%
Tax rate	22.70% - 23.80%	23.25%
Cost of debt	4.40% - 10.10%	7.25%
WACC	6.3% - 9.7%	8.0%

WACC

SPEN.TA WACC calculation

Category	Low	High

Long-term bond rate	4.8%	5.3%
Equity market risk premium	6.1%	7.1%
Adjusted beta	0.66	0.8

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.90%	11.50%

Tax rate	22.70%	23.80%
Debt/Equity ratio	0.86	0.86
Cost of debt	4.40%	10.10%

After-tax WACC	6.3%	9.7%


Selected WACC	8.0%

SPEN.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 SPEN.TA:

cost_of_equity (10.20%) = risk_free_rate (5.05%) + equity_risk_premium (6.60%) * adjusted_beta (0.66) + 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.