CVSG.L WACC - Weighted Average Cost of Capital

The WACC of CVS Group PLC (CVSG.L) is 6.9%.

The Cost of Equity of CVS Group PLC (CVSG.L) is 8.20%.

The Cost of Debt of CVS Group PLC (CVSG.L) is 4.50%.

	Range	Selected
Cost of equity	6.90% - 9.50%	8.20%
Tax rate	30.00% - 35.20%	32.60%
Cost of debt	4.40% - 4.60%	4.50%
WACC	6.0% - 7.9%	6.9%

WACC

CVSG.L WACC calculation

Category	Low	High

Long-term bond rate	4.0%	4.5%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.48	0.64

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.90%	9.50%

Tax rate	30.00%	35.20%
Debt/Equity ratio	0.32	0.32
Cost of debt	4.40%	4.60%

After-tax WACC	6.0%	7.9%


Selected WACC	6.9%

CVSG.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 CVSG.L:

cost_of_equity (8.20%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.48) + 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.