BOWL.L WACC - Weighted Average Cost of Capital
The WACC of Hollywood Bowl Group PLC (BOWL.L) is 6.5%.
| Range | Selected | |
| Cost of equity | 6.7% - 8.7% | 7.7% |
| Tax rate | 22.4% - 26.6% | 24.5% |
| Cost of debt | 5.2% - 5.2% | 5.2% |
| WACC | 5.9% - 7.2% | 6.5% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.45 | 0.53 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.7% | 8.7% |
| Tax rate | 22.4% | 26.6% |
| Debt/Equity ratio | 0.43 | 0.43 |
| Cost of debt | 5.2% | 5.2% |
| After-tax WACC | 5.9% | 7.2% |
| Selected WACC | 6.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| BOWL.L | Hollywood Bowl Group PLC | 0.43 | 1.44 | 1.08 |
| AGF B.CO | Agf A/S | 0 | 0.02 | 0.02 |
| ATIC.ST | Actic Group AB | 1.88 | 1.34 | 0.55 |
| GYM.L | GYM Group PLC | 1.5 | 0.43 | 0.2 |
| KYRI.AT | Kiriacoulis Mediterranean Cruises Shipping SA | 1.04 | 0.44 | 0.24 |
| MLCMB.PA | Compagnie du Mont Blanc SA | 1.33 | 0.37 | 0.19 |
| SNOW.AS | SnowWorld NV | 1.6 | 0.07 | 0.03 |
| TEG.L | Ten Entertainment Group PLC | 0.71 | 0.35 | 0.23 |
| TIV.CO | Tivoli A/S | 0.09 | -0.01 | -0.01 |
| TVRB.PA | Televerbier SA | 0.47 | -0.48 | -0.36 |
| Low | High | |
| Unlevered beta | 0.12 | 0.21 |
| Relevered beta | 0.18 | 0.3 |
| Adjusted relevered beta | 0.45 | 0.53 |
BOWL.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 BOWL.L:
cost_of_equity (7.70%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.45) + 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.