COG.L WACC - Weighted Average Cost of Capital

The WACC of Cambridge Cognition Holdings PLC (COG.L) is 11.4%.

The Cost of Equity of Cambridge Cognition Holdings PLC (COG.L) is 7.15%.

The Cost of Debt of Cambridge Cognition Holdings PLC (COG.L) is 83.45%.

	Range	Selected
Cost of equity	5.80% - 8.50%	7.15%
Tax rate	21.30% - 33.30%	27.30%
Cost of debt	7.00% - 159.90%	83.45%
WACC	5.7% - 17.0%	11.4%

WACC

COG.L WACC calculation

Category	Low	High

Long-term bond rate	4.0%	4.5%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.29	0.51

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.80%	8.50%

Tax rate	21.30%	33.30%
Debt/Equity ratio	0.09	0.09
Cost of debt	7.00%	159.90%

After-tax WACC	5.7%	17.0%


Selected WACC	11.4%

COG.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 COG.L:

cost_of_equity (7.15%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.29) + 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.