The WACC of Tat Gida Sanayi AS (TATGD.IS) is 26.8%.
Range | Selected | |
Cost of equity | 26.10% - 31.40% | 28.75% |
Tax rate | 6.60% - 12.00% | 9.30% |
Cost of debt | 19.50% - 22.50% | 21.00% |
WACC | 24.5% - 29.0% | 26.8% |
Category | Low | High |
Long-term bond rate | 21.4% | 21.9% |
Equity market risk premium | 10.2% | 11.2% |
Adjusted beta | 0.47 | 0.81 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 26.10% | 31.40% |
Tax rate | 6.60% | 12.00% |
Debt/Equity ratio | 0.26 | 0.26 |
Cost of debt | 19.50% | 22.50% |
After-tax WACC | 24.5% | 29.0% |
Selected WACC | 26.8% | |
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 TATGD.IS:
cost_of_equity (28.75%) = risk_free_rate (21.65%) + equity_risk_premium (10.70%) * adjusted_beta (0.47) + 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.