7DIG.L WACC - Weighted Average Cost of Capital
The WACC of 7digital Group plc (7DIG.L) is 7.3%.
| Range | Selected | |
| Cost of equity | 6.0% - 8.7% | 7.35% |
| Tax rate | 1.0% - 2.1% | 1.55% |
| Cost of debt | 7.0% - 7.0% | 7% |
| WACC | 6.1% - 8.5% | 7.3% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.34 | 0.52 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.0% | 8.7% |
| Tax rate | 1.0% | 2.1% |
| Debt/Equity ratio | 0.11 | 0.11 |
| Cost of debt | 7.0% | 7.0% |
| After-tax WACC | 6.1% | 8.5% |
| Selected WACC | 7.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 7DIG.L | 7digital Group plc | 0.11 | 1.38 | 1.25 |
| ALWED.PA | Wedia SA | 0.21 | -0.18 | -0.15 |
| ARC.L | Arcontech Group PLC | 0.05 | -0.45 | -0.43 |
| HEEROS.HE | Heeros Oyj | 0.02 | -0.73 | -0.71 |
| IGP.L | Intercede Group PLC | 0.01 | 1.1 | 1.1 |
| IQG.L | IQGeo Group PLC | 0.01 | 1.3 | 1.29 |
| IVX.DE | InVision AG | 0.69 | 0.68 | 0.41 |
| M4B.WA | M4B SA | 0.14 | 0.19 | 0.17 |
| PEB.L | Pebble Beach Systems Group PLC | 0.61 | 0.14 | 0.09 |
| XMR.ST | XMReality AB (publ) | 0.98 | -0.12 | -0.06 |
| Low | High | |
| Unlevered beta | 0.03 | 0.26 |
| Relevered beta | 0.01 | 0.28 |
| Adjusted relevered beta | 0.34 | 0.52 |
7DIG.L'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 7DIG.L:
cost_of_equity (7.35%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.34) + 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.