The WACC of Mondi Tire Kutsan Kagit ve Ambalaj Sanayi AS (TIRE.IS) is 27.2%.
| Range | Selected | |
| Cost of equity | 26.90% - 30.20% | 28.55% |
| Tax rate | 8.80% - 16.00% | 12.40% |
| Cost of debt | 18.30% - 22.70% | 20.50% |
| WACC | 25.6% - 28.8% | 27.2% |
| Category | Low | High |
| Long-term bond rate | 21.4% | 21.9% |
| Equity market risk premium | 10.2% | 11.2% |
| Adjusted beta | 0.54 | 0.7 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 26.90% | 30.20% |
| Tax rate | 8.80% | 16.00% |
| Debt/Equity ratio | 0.15 | 0.15 |
| Cost of debt | 18.30% | 22.70% |
| After-tax WACC | 25.6% | 28.8% |
| Selected WACC | 27.2% | |
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 TIRE.IS:
cost_of_equity (28.55%) = risk_free_rate (21.65%) + equity_risk_premium (10.70%) * adjusted_beta (0.54) + 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.