CPI.L
Capita PLC
Price:  
255.50 
GBP
Volume:  
250,000.00
United Kingdom | IT Services
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CPI.L WACC - Weighted Average Cost of Capital

The WACC of Capita PLC (CPI.L) is 6.3%.

The Cost of Equity of Capita PLC (CPI.L) is 13.20%.
The Cost of Debt of Capita PLC (CPI.L) is 5.75%.

Range Selected
Cost of equity 10.90% - 15.50% 13.20%
Tax rate 28.10% - 46.40% 37.25%
Cost of debt 4.50% - 7.00% 5.75%
WACC 5.4% - 7.1% 6.3%
WACC

CPI.L WACC calculation

Category Low High
Long-term bond rate 4.0% 4.5%
Equity market risk premium 6.0% 7.0%
Adjusted beta 1.15 1.5
Additional risk adjustments 0.0% 0.5%
Cost of equity 10.90% 15.50%
Tax rate 28.10% 46.40%
Debt/Equity ratio 2.46 2.46
Cost of debt 4.50% 7.00%
After-tax WACC 5.4% 7.1%
Selected WACC 6.3%

CPI.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 CPI.L:

cost_of_equity (13.20%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (1.15) + 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.