COA.L WACC - Weighted Average Cost of Capital

The WACC of Coats Group PLC (COA.L) is 6.7%.

The Cost of Equity of Coats Group PLC (COA.L) is 8.60%.

The Cost of Debt of Coats Group PLC (COA.L) is 5.15%.

	Range	Selected
Cost of equity	7.20% - 10.00%	8.60%
Tax rate	34.60% - 35.60%	35.10%
Cost of debt	4.60% - 5.70%	5.15%
WACC	5.7% - 7.8%	6.7%

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	0.53	0.72

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.20%	10.00%

Tax rate	34.60%	35.60%
Debt/Equity ratio	0.54	0.54
Cost of debt	4.60%	5.70%

After-tax WACC	5.7%	7.8%


Selected WACC	6.7%

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 (8.60%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.53) + 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.