APH.L
Alliance Pharma PLC
Price:  
64.60 
GBP
Volume:  
1,165,679.00
United Kingdom | Pharmaceuticals
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APH.L WACC - Weighted Average Cost of Capital

The WACC of Alliance Pharma PLC (APH.L) is 6.6%.

The Cost of Equity of Alliance Pharma PLC (APH.L) is 7.30%.
The Cost of Debt of Alliance Pharma PLC (APH.L) is 5.65%.

Range Selected
Cost of equity 6.40% - 8.20% 7.30%
Tax rate 29.60% - 34.60% 32.10%
Cost of debt 5.10% - 6.20% 5.65%
WACC 5.8% - 7.3% 6.6%
WACC

APH.L WACC calculation

Category Low High
Long-term bond rate 4.0% 4.5%
Equity market risk premium 6.0% 7.0%
Adjusted beta 0.41 0.47
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.40% 8.20%
Tax rate 29.60% 34.60%
Debt/Equity ratio 0.27 0.27
Cost of debt 5.10% 6.20%
After-tax WACC 5.8% 7.3%
Selected WACC 6.6%

APH.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 APH.L:

cost_of_equity (7.30%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.41) + 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.