BAG.L WACC - Weighted Average Cost of Capital

The WACC of A.G.Barr PLC (BAG.L) is 9.3%.

The Cost of Equity of A.G.Barr PLC (BAG.L) is 9.35%.

The Cost of Debt of A.G.Barr PLC (BAG.L) is 4.30%.

	Range	Selected
Cost of equity	8.20% - 10.50%	9.35%
Tax rate	25.20% - 25.40%	25.30%
Cost of debt	4.00% - 4.60%	4.30%
WACC	8.1% - 10.5%	9.3%

WACC

BAG.L WACC calculation

Category	Low	High

Long-term bond rate	4.0%	4.5%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.7	0.79

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.20%	10.50%

Tax rate	25.20%	25.40%
Debt/Equity ratio	0.01	0.01
Cost of debt	4.00%	4.60%

After-tax WACC	8.1%	10.5%


Selected WACC	9.3%

BAG.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 BAG.L:

cost_of_equity (9.35%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.7) + 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.