888.L WACC - Weighted Average Cost of Capital

The WACC of 888 Holdings PLC (888.L) is 59.6%.

The Cost of Equity of 888 Holdings PLC (888.L) is 8.25%.

The Cost of Debt of 888 Holdings PLC (888.L) is 93.35%.

	Range	Selected
Cost of equity	6.40% - 10.10%	8.25%
Tax rate	13.10% - 22.90%	18.00%
Cost of debt	17.70% - 169.00%	93.35%
WACC	13.6% - 105.6%	59.6%

WACC

888.L WACC calculation

Category	Low	High

Long-term bond rate	3.7%	4.2%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.44	0.77

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.40%	10.10%

Tax rate	13.10%	22.90%
Debt/Equity ratio	3.87	3.87
Cost of debt	17.70%	169.00%

After-tax WACC	13.6%	105.6%


Selected WACC	59.6%

888.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 888.L:

cost_of_equity (8.25%) = risk_free_rate (3.95%) + equity_risk_premium (6.50%) * adjusted_beta (0.44) + 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.