CKN.L
Clarkson PLC
Price:  
3,210.00 
GBP
Volume:  
175,557.00
United Kingdom | Marine
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CKN.L WACC - Weighted Average Cost of Capital

The WACC of Clarkson PLC (CKN.L) is 8.4%.

The Cost of Equity of Clarkson PLC (CKN.L) is 8.70%.
The Cost of Debt of Clarkson PLC (CKN.L) is 4.40%.

Range Selected
Cost of equity 7.40% - 10.00% 8.70%
Tax rate 21.20% - 35.70% 28.45%
Cost of debt 4.20% - 4.60% 4.40%
WACC 7.2% - 9.7% 8.4%
WACC

CKN.L WACC calculation

Category Low High
Long-term bond rate 4.0% 4.5%
Equity market risk premium 6.0% 7.0%
Adjusted beta 0.57 0.71
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.40% 10.00%
Tax rate 21.20% 35.70%
Debt/Equity ratio 0.05 0.05
Cost of debt 4.20% 4.60%
After-tax WACC 7.2% 9.7%
Selected WACC 8.4%

CKN.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 CKN.L:

cost_of_equity (8.70%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.57) + 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.