COA.L WACC - Weighted Average Cost of Capital

The WACC of Coats Group PLC (COA.L) is 7.1%.

The Cost of Equity of Coats Group PLC (COA.L) is 8.20%.

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

	Range	Selected
Cost of equity	7.20% - 9.20%	8.20%
Tax rate	36.50% - 39.10%	37.80%
Cost of debt	4.90% - 5.30%	5.10%
WACC	6.3% - 7.9%	7.1%

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	0.54	0.61

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.20%	9.20%

Tax rate	36.50%	39.10%
Debt/Equity ratio	0.28	0.28
Cost of debt	4.90%	5.30%

After-tax WACC	6.3%	7.9%


Selected WACC	7.1%

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 (8.20%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.54) + 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.