AFM.L WACC - Weighted Average Cost of Capital

The WACC of Alpha Financial Markets Consulting PLC (AFM.L) is 8.0%.

The Cost of Equity of Alpha Financial Markets Consulting PLC (AFM.L) is 8.00%.

The Cost of Debt of Alpha Financial Markets Consulting PLC (AFM.L) is 14.20%.

	Range	Selected
Cost of equity	6.80% - 9.20%	8.00%
Tax rate	32.30% - 34.20%	33.25%
Cost of debt	4.60% - 23.80%	14.20%
WACC	6.8% - 9.2%	8.0%

WACC

AFM.L WACC calculation

Category	Low	High

Long-term bond rate	4.0%	4.5%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.47	0.6

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.80%	9.20%

Tax rate	32.30%	34.20%
Debt/Equity ratio	0	0
Cost of debt	4.60%	23.80%

After-tax WACC	6.8%	9.2%


Selected WACC	8.0%

AFM.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 AFM.L:

cost_of_equity (8.00%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.47) + 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.