AHT.L
Ashtead Group PLC
Price:  
4,647.00 
GBP
Volume:  
764,012.00
United Kingdom | Trading Companies & Distributors
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AHT.L WACC - Weighted Average Cost of Capital

The WACC of Ashtead Group PLC (AHT.L) is 6.5%.

The Cost of Equity of Ashtead Group PLC (AHT.L) is 8.10%.
The Cost of Debt of Ashtead Group PLC (AHT.L) is 4.90%.

Range Selected
Cost of equity 6.70% - 9.50% 8.10%
Tax rate 24.70% - 25.00% 24.85%
Cost of debt 4.90% - 4.90% 4.90%
WACC 5.7% - 7.4% 6.5%
WACC

AHT.L WACC calculation

Category Low High
Long-term bond rate 4.0% 4.5%
Equity market risk premium 6.0% 7.0%
Adjusted beta 0.46 0.64
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.70% 9.50%
Tax rate 24.70% 25.00%
Debt/Equity ratio 0.55 0.55
Cost of debt 4.90% 4.90%
After-tax WACC 5.7% 7.4%
Selected WACC 6.5%

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.