The WACC of Turk Hava Yollari AO (THYAO.IS) is 8.8%.
| Range | Selected | |
| Cost of equity | 50.70% - 55.80% | 53.25% |
| Tax rate | 16.10% - 20.50% | 18.30% |
| Cost of debt | 4.00% - 7.00% | 5.50% |
| WACC | 7.5% - 10.0% | 8.8% |
| Category | Low | High |
| Long-term bond rate | 21.4% | 21.9% |
| Equity market risk premium | 10.2% | 11.2% |
| Adjusted beta | 2.88 | 2.99 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 50.70% | 55.80% |
| Tax rate | 16.10% | 20.50% |
| Debt/Equity ratio | 10.37 | 10.37 |
| Cost of debt | 4.00% | 7.00% |
| After-tax WACC | 7.5% | 10.0% |
| Selected WACC | 8.8% | |
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 THYAO.IS:
cost_of_equity (53.25%) = risk_free_rate (21.65%) + equity_risk_premium (10.70%) * adjusted_beta (2.88) + 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.