COA.L WACC - Weighted Average Cost of Capital

The WACC of Coats Group PLC (COA.L) is 6.9%.

The Cost of Equity of Coats Group PLC (COA.L) is 8.55%.

The Cost of Debt of Coats Group PLC (COA.L) is 5.10%.

	Range	Selected
Cost of equity	7.40% - 9.70%	8.55%
Tax rate	36.50% - 39.10%	37.80%
Cost of debt	4.90% - 5.30%	5.10%
WACC	6.0% - 7.7%	6.9%

WACC

COA.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	0.68

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.40%	9.70%

Tax rate	36.50%	39.10%
Debt/Equity ratio	0.46	0.46
Cost of debt	4.90%	5.30%

After-tax WACC	6.0%	7.7%


Selected WACC	6.9%

COA.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 COA.L:

cost_of_equity (8.55%) = 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.