TKM1T.TL WACC - Weighted Average Cost of Capital

The WACC of Tallinna Kaubamaja Grupp AS (TKM1T.TL) is 7.5%.

The Cost of Equity of Tallinna Kaubamaja Grupp AS (TKM1T.TL) is 10.10%.

The Cost of Debt of Tallinna Kaubamaja Grupp AS (TKM1T.TL) is 5.25%.

	Range	Selected
Cost of equity	8.30% - 11.90%	10.10%
Tax rate	14.60% - 16.80%	15.70%
Cost of debt	4.00% - 6.50%	5.25%
WACC	6.1% - 8.9%	7.5%

WACC

TKM1T.TL WACC calculation

Category	Low	High

Long-term bond rate	5.9%	6.4%
Equity market risk premium	6.1%	7.1%
Adjusted beta	0.4	0.7

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.30%	11.90%

Tax rate	14.60%	16.80%
Debt/Equity ratio	0.85	0.85
Cost of debt	4.00%	6.50%

After-tax WACC	6.1%	8.9%


Selected WACC	7.5%

TKM1T.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 TKM1T.TL:

cost_of_equity (10.10%) = risk_free_rate (6.15%) + equity_risk_premium (6.60%) * adjusted_beta (0.4) + 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.