AHT.L WACC - Weighted Average Cost of Capital
The WACC of Ashtead Group PLC (AHT.L) is 6.6%.
| Range | Selected | |
| Cost of equity | 6.7% - 9.5% | 8.1% |
| Tax rate | 24.7% - 25.0% | 24.85% |
| Cost of debt | 4.9% - 4.9% | 4.9% |
| WACC | 5.7% - 7.4% | 6.6% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.46 | 0.64 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.7% | 9.5% |
| Tax rate | 24.7% | 25.0% |
| Debt/Equity ratio | 0.54 | 0.54 |
| Cost of debt | 4.9% | 4.9% |
| After-tax WACC | 5.7% | 7.4% |
| Selected WACC | 6.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| AHT.L | Ashtead Group PLC | 0.54 | 1.37 | 0.97 |
| AA4.L | Amedeo Air Four Plus Ltd | 6.68 | 0.04 | 0.01 |
| ASY.L | Andrews Sykes Group PLC | 0.07 | 0.08 | 0.08 |
| AVAP.L | Avation PLC | 4.77 | 0.81 | 0.18 |
| DPA.L | DP Aircraft I Ltd | 2.41 | -0.6 | -0.21 |
| GALQ.MC | General de Alquiler de Maquinaria SA | 2.1 | 0.8 | 0.31 |
| HRS.WA | Herkules SA | 1.2 | 0.68 | 0.36 |
| HSS.L | HSS Hire Group PLC | 2.56 | 0.19 | 0.07 |
| SDY.L | Speedy Hire PLC | 1.67 | 1.06 | 0.47 |
| VP.L | VP PLC | 0.97 | 0.66 | 0.38 |
| Low | High | |
| Unlevered beta | 0.14 | 0.33 |
| Relevered beta | 0.19 | 0.46 |
| Adjusted relevered beta | 0.46 | 0.64 |
AHT.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 AHT.L:
cost_of_equity (8.10%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.46) + 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.