The WACC of Vakif Gayrimenkul Yatirim Ortakligi AS (VKGYO.IS) is 23.5%.
| Range | Selected | |
| Cost of equity | 26.70% - 28.60% | 27.65% |
| Tax rate | 21.20% - 22.00% | 21.60% |
| Cost of debt | 7.00% - 7.00% | 7.00% |
| WACC | 22.7% - 24.2% | 23.5% |
| Category | Low | High |
| Long-term bond rate | 21.4% | 21.9% |
| Equity market risk premium | 10.2% | 11.2% |
| Adjusted beta | 0.53 | 0.56 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 26.70% | 28.60% |
| Tax rate | 21.20% | 22.00% |
| Debt/Equity ratio | 0.23 | 0.23 |
| Cost of debt | 7.00% | 7.00% |
| After-tax WACC | 22.7% | 24.2% |
| Selected WACC | 23.5% | |
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 VKGYO.IS:
cost_of_equity (27.65%) = risk_free_rate (21.65%) + equity_risk_premium (10.70%) * adjusted_beta (0.53) + 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.