The WACC of Anglo Pacific Group PLC (APF.L) is 10.2%.
| Range | Selected | |
| Cost of equity | 9.30% - 12.10% | 10.70% |
| Tax rate | 31.20% - 31.50% | 31.35% |
| Cost of debt | 5.20% - 10.70% | 7.95% |
| WACC | 8.7% - 11.6% | 10.2% |
| Category | Low | High |
| Long-term bond rate | 4.4% | 4.9% |
| Equity market risk premium | 6.4% | 7.4% |
| Adjusted beta | 0.75 | 0.9 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.30% | 12.10% |
| Tax rate | 31.20% | 31.50% |
| Debt/Equity ratio | 0.11 | 0.11 |
| Cost of debt | 5.20% | 10.70% |
| After-tax WACC | 8.7% | 11.6% |
| Selected WACC | 10.2% | |
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 APF.L:
cost_of_equity (10.70%) = risk_free_rate (4.65%) + equity_risk_premium (6.90%) * adjusted_beta (0.75) + 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.