BOY.L WACC - Weighted Average Cost of Capital
The WACC of Bodycote PLC (BOY.L) is 10.0%.
| Range | Selected | |
| Cost of equity | 9.7% - 12.2% | 10.95% |
| Tax rate | 22.5% - 24.4% | 23.45% |
| Cost of debt | 4.7% - 5.9% | 5.3% |
| WACC | 8.9% - 11.2% | 10.0% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.95 | 1.03 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.7% | 12.2% |
| Tax rate | 22.5% | 24.4% |
| Debt/Equity ratio | 0.15 | 0.15 |
| Cost of debt | 4.7% | 5.9% |
| After-tax WACC | 8.9% | 11.2% |
| Selected WACC | 10.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| BOY.L | Bodycote PLC | 0.15 | 1.91 | 1.72 |
| BCHN.SW | Burckhardt Compression Holding AG | 0.07 | 0.96 | 0.9 |
| BEIA B.ST | Beijer Alma AB | 0.24 | 1.2 | 1.01 |
| BSS.MI | Biesse SpA | 0.98 | 1.1 | 0.63 |
| EPRO B.ST | Electrolux Professional publ AB | 0.17 | 1.1 | 0.98 |
| INRN.SW | Interroll Holding AG | 0.01 | 1.04 | 1.04 |
| KARN.SW | Kardex Holding AG | 0 | 0.87 | 0.87 |
| PFV.DE | Pfeiffer Vacuum Technology AG | 0.1 | 0.13 | 0.12 |
| STM.DE | Stabilus SA | 1.25 | 1.51 | 0.77 |
| ZOT.MC | Zardoya Otis SA | 0.01 | 0.53 | 0.53 |
| Low | High | |
| Unlevered beta | 0.83 | 0.93 |
| Relevered beta | 0.93 | 1.04 |
| Adjusted relevered beta | 0.95 | 1.03 |
BOY.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 BOY.L:
cost_of_equity (10.95%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.95) + 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.