ADA.L
Adams PLC
Price:  
3.5 
GBP
Volume:  
19,998
Isle of Man | Capital Markets

ADA.L WACC - Weighted Average Cost of Capital

The WACC of Adams PLC (ADA.L) is 7.0%.

The Cost of Equity of Adams PLC (ADA.L) is 9.95%.
The Cost of Debt of Adams PLC (ADA.L) is 5%.

RangeSelected
Cost of equity7.5% - 12.4%9.95%
Tax rate19.0% - 19.0%19%
Cost of debt5.0% - 5.0%5%
WACC5.8% - 8.2%7.0%
WACC

ADA.L WACC calculation

CategoryLowHigh
Long-term bond rate4.0%4.5%
Equity market risk premium6.0%7.0%
Adjusted beta0.581.06
Additional risk adjustments0.0%0.5%
Cost of equity7.5%12.4%
Tax rate19.0%19.0%
Debt/Equity ratio
11
Cost of debt5.0%5.0%
After-tax WACC5.8%8.2%
Selected WACC7.0%

ADA.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 ADA.L:

cost_of_equity (9.95%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.58) + 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.