CML.L
CML Microsystems Plc
Price:  
255.00 
GBP
Volume:  
12,620.00
United Kingdom | Semiconductors & Semiconductor Equipment
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CML.L WACC - Weighted Average Cost of Capital

The WACC of CML Microsystems Plc (CML.L) is 8.0%.

The Cost of Equity of CML Microsystems Plc (CML.L) is 8.10%.
The Cost of Debt of CML Microsystems Plc (CML.L) is 5.00%.

Range Selected
Cost of equity 6.80% - 9.40% 8.10%
Tax rate 17.30% - 22.30% 19.80%
Cost of debt 5.00% - 5.00% 5.00%
WACC 6.7% - 9.2% 8.0%
WACC

CML.L WACC calculation

Category Low High
Long-term bond rate 4.0% 4.5%
Equity market risk premium 6.0% 7.0%
Adjusted beta 0.46 0.63
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.80% 9.40%
Tax rate 17.30% 22.30%
Debt/Equity ratio 0.02 0.02
Cost of debt 5.00% 5.00%
After-tax WACC 6.7% 9.2%
Selected WACC 8.0%

CML.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 CML.L:

cost_of_equity (8.10%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.46) + 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.