ECK.L
Eckoh PLC
Price:  
53.80 
GBP
Volume:  
1,704,677.00
United Kingdom | IT Services
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ECK.L WACC - Weighted Average Cost of Capital

The WACC of Eckoh PLC (ECK.L) is 8.0%.

The Cost of Equity of Eckoh PLC (ECK.L) is 8.05%.
The Cost of Debt of Eckoh PLC (ECK.L) is 4.30%.

Range Selected
Cost of equity 6.90% - 9.20% 8.05%
Tax rate 15.30% - 25.10% 20.20%
Cost of debt 4.00% - 4.60% 4.30%
WACC 6.9% - 9.2% 8.0%
WACC

ECK.L WACC calculation

Category Low High
Long-term bond rate 4.0% 4.5%
Equity market risk premium 6.0% 7.0%
Adjusted beta 0.49 0.6
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.90% 9.20%
Tax rate 15.30% 25.10%
Debt/Equity ratio 0.01 0.01
Cost of debt 4.00% 4.60%
After-tax WACC 6.9% 9.2%
Selected WACC 8.0%

ECK.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 ECK.L:

cost_of_equity (8.05%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.49) + 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.