BARC.L
Barclays PLC
Price:  
333.20 
GBP
Volume:  
23,144,370.00
United Kingdom | Banks
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BARC.L WACC - Weighted Average Cost of Capital

The WACC of Barclays PLC (BARC.L) is 6.4%.

The Cost of Equity of Barclays PLC (BARC.L) is 19.15%.
The Cost of Debt of Barclays PLC (BARC.L) is 5.00%.

Range Selected
Cost of equity 16.40% - 21.90% 19.15%
Tax rate 17.20% - 19.20% 18.20%
Cost of debt 5.00% - 5.00% 5.00%
WACC 6.1% - 6.8% 6.4%
WACC

BARC.L WACC calculation

Category Low High
Long-term bond rate 4.0% 4.5%
Equity market risk premium 6.0% 7.0%
Adjusted beta 2.08 2.43
Additional risk adjustments 0.0% 0.5%
Cost of equity 16.40% 21.90%
Tax rate 17.20% 19.20%
Debt/Equity ratio 5.42 5.42
Cost of debt 5.00% 5.00%
After-tax WACC 6.1% 6.8%
Selected WACC 6.4%

BARC.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 BARC.L:

cost_of_equity (19.15%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (2.08) + 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.