ESLT.TA WACC - Weighted Average Cost of Capital

The WACC of Elbit Systems Ltd (ESLT.TA) is 10.0%.

The Cost of Equity of Elbit Systems Ltd (ESLT.TA) is 10.00%.

The Cost of Debt of Elbit Systems Ltd (ESLT.TA) is 5.45%.

	Range	Selected
Cost of equity	8.70% - 11.30%	10.00%
Tax rate	10.90% - 12.40%	11.65%
Cost of debt	5.00% - 5.90%	5.45%
WACC	8.6% - 11.3%	10.0%

WACC

ESLT.TA WACC calculation

Category	Low	High

Long-term bond rate	4.8%	5.3%
Equity market risk premium	5.6%	6.6%
Adjusted beta	0.69	0.83

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.70%	11.30%

Tax rate	10.90%	12.40%
Debt/Equity ratio	0.01	0.01
Cost of debt	5.00%	5.90%

After-tax WACC	8.6%	11.3%


Selected WACC	10.0%

ESLT.TA'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 ESLT.TA:

cost_of_equity (10.00%) = risk_free_rate (5.05%) + equity_risk_premium (6.10%) * adjusted_beta (0.69) + 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.