EDR.L
Egdon Resources PLC
Price:  
4.40 
GBP
Volume:  
71,933.00
United Kingdom | Oil, Gas & Consumable Fuels
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EDR.L WACC - Weighted Average Cost of Capital

The WACC of Egdon Resources PLC (EDR.L) is 7.5%.

The Cost of Equity of Egdon Resources PLC (EDR.L) is 7.60%.
The Cost of Debt of Egdon Resources PLC (EDR.L) is 4.60%.

Range Selected
Cost of equity 6.10% - 9.10% 7.60%
Tax rate 19.00% - 19.00% 19.00%
Cost of debt 4.60% - 4.60% 4.60%
WACC 6.0% - 8.9% 7.5%
WACC

EDR.L WACC calculation

Category Low High
Long-term bond rate 4.0% 4.5%
Equity market risk premium 6.0% 7.0%
Adjusted beta 0.35 0.59
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.10% 9.10%
Tax rate 19.00% 19.00%
Debt/Equity ratio 0.04 0.04
Cost of debt 4.60% 4.60%
After-tax WACC 6.0% 8.9%
Selected WACC 7.5%

EDR.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 EDR.L:

cost_of_equity (7.60%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.35) + 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.