CRST.L WACC - Weighted Average Cost of Capital

The WACC of Crest Nicholson Holdings PLC (CRST.L) is 7.5%.

The Cost of Equity of Crest Nicholson Holdings PLC (CRST.L) is 10.15%.

The Cost of Debt of Crest Nicholson Holdings PLC (CRST.L) is 6.05%.

	Range	Selected
Cost of equity	7.80% - 12.50%	10.15%
Tax rate	21.30% - 23.20%	22.25%
Cost of debt	5.70% - 6.40%	6.05%
WACC	6.2% - 8.8%	7.5%

WACC

CRST.L WACC calculation

Category	Low	High

Long-term bond rate	4.0%	4.5%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.64	1.08

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.80%	12.50%

Tax rate	21.30%	23.20%
Debt/Equity ratio	0.98	0.98
Cost of debt	5.70%	6.40%

After-tax WACC	6.2%	8.8%


Selected WACC	7.5%

CRST.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 CRST.L:

cost_of_equity (10.15%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.64) + 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.