ARW.L
Arrow Global Group PLC
Price:  
307 
GBP
Volume:  
17,332
United Kingdom | Consumer Finance

ARW.L WACC - Weighted Average Cost of Capital

The WACC of Arrow Global Group PLC (ARW.L) is 4.9%.

The Cost of Equity of Arrow Global Group PLC (ARW.L) is 7.3%.
The Cost of Debt of Arrow Global Group PLC (ARW.L) is 5%.

RangeSelected
Cost of equity5.1% - 9.5%7.3%
Tax rate20.0% - 22.7%21.35%
Cost of debt5.0% - 5.0%5%
WACC4.3% - 5.5%4.9%
WACC

ARW.L WACC calculation

CategoryLowHigh
Long-term bond rate2.9%3.4%
Equity market risk premium5.3%6.3%
Adjusted beta0.410.87
Additional risk adjustments0.0%0.5%
Cost of equity5.1%9.5%
Tax rate20.0%22.7%
Debt/Equity ratio
2.532.53
Cost of debt5.0%5.0%
After-tax WACC4.3%5.5%
Selected WACC4.9%

ARW.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 ARW.L:

cost_of_equity (7.30%) = risk_free_rate (3.15%) + equity_risk_premium (5.80%) * 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.