The WACC of Tofas Turk Otomobil Fabrikasi AS (TOASO.IS) is 25.3%.
| Range | Selected | |
| Cost of equity | 27.80% - 31.50% | 29.65% |
| Tax rate | 2.90% - 3.60% | 3.25% |
| Cost of debt | 4.00% - 22.00% | 13.00% |
| WACC | 21.7% - 28.9% | 25.3% |
| Category | Low | High |
| Long-term bond rate | 21.4% | 21.9% |
| Equity market risk premium | 10.2% | 11.2% |
| Adjusted beta | 0.63 | 0.82 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 27.80% | 31.50% |
| Tax rate | 2.90% | 3.60% |
| Debt/Equity ratio | 0.34 | 0.34 |
| Cost of debt | 4.00% | 22.00% |
| After-tax WACC | 21.7% | 28.9% |
| Selected WACC | 25.3% | |
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 TOASO.IS:
cost_of_equity (29.65%) = risk_free_rate (21.65%) + equity_risk_premium (10.70%) * adjusted_beta (0.63) + 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.