The WACC of Argo Blockchain PLC (ARB.L) is 10.5%.
| Range | Selected | |
| Cost of equity | 5.00% - 15.30% | 10.15% |
| Tax rate | 0.40% - 2.30% | 1.35% |
| Cost of debt | 7.00% - 14.60% | 10.80% |
| WACC | 6.6% - 14.4% | 10.5% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | -0.42 | 0.97 |
| Additional risk adjustments | 3.5% | 4.0% |
| Cost of equity | 5.00% | 15.30% |
| Tax rate | 0.40% | 2.30% |
| Debt/Equity ratio | 4.85 | 4.85 |
| Cost of debt | 7.00% | 14.60% |
| After-tax WACC | 6.6% | 14.4% |
| Selected WACC | 10.5% | |
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 ARB.L:
cost_of_equity (10.15%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (-0.42) + risk_adjustments (3.75%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.