ACT.L
Actual Experience PLC
Price:  
0.43 
GBP
Volume:  
130,802.00
United Kingdom | Software
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ACT.L WACC - Weighted Average Cost of Capital

The WACC of Actual Experience PLC (ACT.L) is 6.9%.

The Cost of Equity of Actual Experience PLC (ACT.L) is 7.00%.
The Cost of Debt of Actual Experience PLC (ACT.L) is 7.00%.

Range Selected
Cost of equity 5.80% - 8.20% 7.00%
Tax rate 2.90% - 4.50% 3.70%
Cost of debt 7.00% - 7.00% 7.00%
WACC 6.2% - 7.6% 6.9%
WACC

ACT.L WACC calculation

Category Low High
Long-term bond rate 4.0% 4.5%
Equity market risk premium 6.0% 7.0%
Adjusted beta 0.3 0.46
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.80% 8.20%
Tax rate 2.90% 4.50%
Debt/Equity ratio 0.64 0.64
Cost of debt 7.00% 7.00%
After-tax WACC 6.2% 7.6%
Selected WACC 6.9%

ACT.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 ACT.L:

cost_of_equity (7.00%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.3) + 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.