ARC.L
Arcontech Group PLC
Price:  
82 
GBP
Volume:  
19,123
United Kingdom | Software

ARC.L WACC - Weighted Average Cost of Capital

The WACC of Arcontech Group PLC (ARC.L) is 8.7%.

The Cost of Equity of Arcontech Group PLC (ARC.L) is 8.7%.
The Cost of Debt of Arcontech Group PLC (ARC.L) is 9.5%.

RangeSelected
Cost of equity7.4% - 10.0%8.7%
Tax rate2.1% - 8.5%5.3%
Cost of debt4.6% - 14.4%9.5%
WACC7.2% - 10.2%8.7%
WACC

ARC.L WACC calculation

CategoryLowHigh
Long-term bond rate4.0%4.5%
Equity market risk premium6.0%7.0%
Adjusted beta0.560.72
Additional risk adjustments0.0%0.5%
Cost of equity7.4%10.0%
Tax rate2.1%8.5%
Debt/Equity ratio
0.050.05
Cost of debt4.6%14.4%
After-tax WACC7.2%10.2%
Selected WACC8.7%

ARC.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 ARC.L:

cost_of_equity (8.70%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.56) + 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.