TAL1T.TL WACC - Weighted Average Cost of Capital

The WACC of Tallink Grupp AS (TAL1T.TL) is 10.5%.

The Cost of Equity of Tallink Grupp AS (TAL1T.TL) is 12.70%.

The Cost of Debt of Tallink Grupp AS (TAL1T.TL) is 9.20%.

	Range	Selected
Cost of equity	10.60% - 14.80%	12.70%
Tax rate	3.30% - 5.60%	4.45%
Cost of debt	4.00% - 14.40%	9.20%
WACC	6.9% - 14.1%	10.5%

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	0.77	1.11

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.60%	14.80%

Tax rate	3.30%	5.60%
Debt/Equity ratio	1.21	1.21
Cost of debt	4.00%	14.40%

After-tax WACC	6.9%	14.1%


Selected WACC	10.5%

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 (12.70%) = risk_free_rate (6.15%) + equity_risk_premium (6.60%) * adjusted_beta (0.77) + 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.