ADME.L WACC - Weighted Average Cost of Capital
The WACC of Adm Energy PLC (ADME.L) is 8.5%.
| Range | Selected | |
| Cost of equity | 7.7% - 11.9% | 9.8% |
| Tax rate | 19.0% - 19.0% | 19% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.9% - 10.1% | 8.5% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.62 | 0.98 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.7% | 11.9% |
| Tax rate | 19.0% | 19.0% |
| Debt/Equity ratio | 0.28 | 0.28 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.9% | 10.1% |
| Selected WACC | 8.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| ADME.L | Adm Energy PLC | 0.28 | -2.12 | -1.72 |
| ANGS.L | Angus Energy PLC | 1.68 | -0.23 | -0.1 |
| AST.L | Ascent Resources PLC | 0.07 | 0.17 | 0.16 |
| CAD.L | Cadogan Petroleum PLC | 0.02 | 1.79 | 1.76 |
| CORO.L | Coro Energy Plc | 4.56 | -0.12 | -0.02 |
| EDR.L | Egdon Resources PLC | 0.04 | 1.04 | 1 |
| EOG.L | Europa Oil & Gas (Holdings) PLC | 0 | 0.65 | 0.65 |
| NTOG.L | Nostra Terra Oil and Gas Company PLC | 3.09 | 1.7 | 0.48 |
| PNOR.OL | Petronor E&P Ltd | 0.03 | 1.14 | 1.12 |
| SQZ.L | Serica Energy PLC | 0.45 | 1.47 | 1.08 |
| TRP.L | Tower Resources PLC | 0 | -1.46 | -1.46 |
| Low | High | |
| Unlevered beta | 0.16 | 0.65 |
| Relevered beta | 0.43 | 0.97 |
| Adjusted relevered beta | 0.62 | 0.98 |
ADME.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 ADME.L:
cost_of_equity (9.80%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.62) + 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.