ARE.L WACC - Weighted Average Cost of Capital
The WACC of Arena Events Group PLC (ARE.L) is 7.2%.
| Range | Selected | |
| Cost of equity | 5.4% - 7.4% | 6.4% |
| Tax rate | 2.9% - 4.8% | 3.85% |
| Cost of debt | 7.0% - 10.2% | 8.6% |
| WACC | 6.0% - 8.4% | 7.2% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 5.3% | 6.3% |
| Adjusted beta | 0.46 | 0.54 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.4% | 7.4% |
| Tax rate | 2.9% | 4.8% |
| Debt/Equity ratio | 0.85 | 0.85 |
| Cost of debt | 7.0% | 10.2% |
| After-tax WACC | 6.0% | 8.4% |
| Selected WACC | 7.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| ARE.L | Arena Events Group PLC | 0.85 | 3.44 | 1.89 |
| 24STOR.ST | 24Storage AB | 0.84 | 1.1 | 0.61 |
| B.MI | Bastogi SpA | 1.8 | 0.87 | 0.32 |
| BST.WA | Best SA | 1.19 | 0.19 | 0.09 |
| CFS.WA | Centrum Finansowe SA | 0.27 | -0.05 | -0.04 |
| EAAS.L | Eenergy Group PLC | 0.54 | 0.66 | 0.44 |
| KME.WA | Kancelaria Medius SA w restrukturyzacji | 1.46 | 0.21 | 0.09 |
| NSH.L | Norish PLC | 0.54 | -0.09 | -0.06 |
| SPS.MC | Service Point Solutions SA | 0.25 | -0.57 | -0.46 |
| SUL.WA | Summa Linguae Technologies SA | 0.08 | 0.29 | 0.27 |
| VIN.WA | Gielda Praw Majatkowych Vindexus SA | 0.4 | 0.28 | 0.2 |
| Low | High | |
| Unlevered beta | 0.09 | 0.27 |
| Relevered beta | 0.19 | 0.31 |
| Adjusted relevered beta | 0.46 | 0.54 |
ARE.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 ARE.L:
cost_of_equity (6.40%) = risk_free_rate (3.15%) + equity_risk_premium (5.80%) * adjusted_beta (0.46) + 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.