ARC.L WACC - Weighted Average Cost of Capital
The WACC of Arcontech Group PLC (ARC.L) is 8.6%.
| Range | Selected | |
| Cost of equity | 7.3% - 9.8% | 8.55% |
| Tax rate | 2.1% - 8.5% | 5.3% |
| Cost of debt | 4.6% - 14.4% | 9.5% |
| WACC | 7.1% - 10.0% | 8.6% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.55 | 0.69 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.3% | 9.8% |
| Tax rate | 2.1% | 8.5% |
| Debt/Equity ratio | 0.05 | 0.05 |
| Cost of debt | 4.6% | 14.4% |
| After-tax WACC | 7.1% | 10.0% |
| Selected WACC | 8.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| ARC.L | Arcontech Group PLC | 0.05 | -0.41 | -0.39 |
| IMG.WA | Optigis SA | 0 | 0.72 | 0.71 |
| M4B.WA | M4B SA | 0.14 | 0.16 | 0.14 |
| MBT.L | Mobile Tornado Group PLC | 2.28 | 0.54 | 0.17 |
| MNO.L | Maestrano Group PLC | 0.01 | 0.5 | 0.5 |
| QPR1V.HE | QPR Software Plc | 0.08 | 0.42 | 0.38 |
| RDT.L | Rosslyn Data Technologies PLC | 0.12 | 0.81 | 0.73 |
| SMART.IS | Smartiks Yazilim AS | 0.04 | 0.97 | 0.93 |
| TIDE.L | Crimson Tide PLC | 0.16 | 0.65 | 0.56 |
| XMR.ST | XMReality AB (publ) | 0.22 | 0.24 | 0.2 |
| Low | High | |
| Unlevered beta | 0.31 | 0.52 |
| Relevered beta | 0.33 | 0.54 |
| Adjusted relevered beta | 0.55 | 0.69 |
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 (8.55%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.55) + 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.