BIRG.IR
Bank of Ireland Group PLC
Price:  
12.29 
EUR
Volume:  
2,001,140.00
Ireland | Banks
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BIRG.IR WACC - Weighted Average Cost of Capital

The WACC of Bank of Ireland Group PLC (BIRG.IR) is 8.1%.

The Cost of Equity of Bank of Ireland Group PLC (BIRG.IR) is 11.75%.
The Cost of Debt of Bank of Ireland Group PLC (BIRG.IR) is 5.00%.

Range Selected
Cost of equity 9.70% - 13.80% 11.75%
Tax rate 14.50% - 16.00% 15.25%
Cost of debt 5.00% - 5.00% 5.00%
WACC 7.0% - 9.1% 8.1%
WACC

BIRG.IR WACC calculation

Category Low High
Long-term bond rate 2.7% 3.2%
Equity market risk premium 6.0% 7.0%
Adjusted beta 1.18 1.45
Additional risk adjustments 0.0% 0.5%
Cost of equity 9.70% 13.80%
Tax rate 14.50% 16.00%
Debt/Equity ratio 0.97 0.97
Cost of debt 5.00% 5.00%
After-tax WACC 7.0% 9.1%
Selected WACC 8.1%

BIRG.IR'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 BIRG.IR:

cost_of_equity (11.75%) = risk_free_rate (2.95%) + equity_risk_premium (6.50%) * adjusted_beta (1.18) + 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.