BGS.L
Baillie Gifford Shin Nippon PLC
Price:  
124.80 
GBP
Volume:  
1,286,708.00
United Kingdom | N/A
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BGS.L WACC - Weighted Average Cost of Capital

The WACC of Baillie Gifford Shin Nippon PLC (BGS.L) is 9.4%.

The Cost of Equity of Baillie Gifford Shin Nippon PLC (BGS.L) is 10.50%.
The Cost of Debt of Baillie Gifford Shin Nippon PLC (BGS.L) is 5.50%.

Range Selected
Cost of equity 9.20% - 11.80% 10.50%
Tax rate 0.80% - 1.70% 1.25%
Cost of debt 4.00% - 7.00% 5.50%
WACC 8.1% - 10.7% 9.4%
WACC

BGS.L WACC calculation

Category Low High
Long-term bond rate 4.0% 4.5%
Equity market risk premium 6.0% 7.0%
Adjusted beta 0.87 0.97
Additional risk adjustments 0.0% 0.5%
Cost of equity 9.20% 11.80%
Tax rate 0.80% 1.70%
Debt/Equity ratio 0.27 0.27
Cost of debt 4.00% 7.00%
After-tax WACC 8.1% 10.7%
Selected WACC 9.4%

BGS.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 BGS.L:

cost_of_equity (10.50%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.87) + 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.