TAL1T.TL WACC - Weighted Average Cost of Capital

The WACC of Tallink Grupp AS (TAL1T.TL) is 8.0%.

The Cost of Equity of Tallink Grupp AS (TAL1T.TL) is 10.35%.

The Cost of Debt of Tallink Grupp AS (TAL1T.TL) is 6.75%.

	Range	Selected
Cost of equity	9.10% - 11.60%	10.35%
Tax rate	6.30% - 11.90%	9.10%
Cost of debt	4.00% - 9.50%	6.75%
WACC	6.1% - 9.8%	8.0%

WACC

TAL1T.TL WACC calculation

Category	Low	High

Long-term bond rate	5.9%	6.4%
Equity market risk premium	6.1%	7.1%
Adjusted beta	0.52	0.66

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.10%	11.60%

Tax rate	6.30%	11.90%
Debt/Equity ratio	1.22	1.22
Cost of debt	4.00%	9.50%

After-tax WACC	6.1%	9.8%


Selected WACC	8.0%

TAL1T.TL'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 TAL1T.TL:

cost_of_equity (10.35%) = risk_free_rate (6.15%) + equity_risk_premium (6.60%) * adjusted_beta (0.52) + 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.