ELM.L WACC - Weighted Average Cost of Capital
The WACC of Elementis PLC (ELM.L) is 8.7%.
| Range | Selected | |
| Cost of equity | 8.0% - 11.2% | 9.6% |
| Tax rate | 4.7% - 8.9% | 6.8% |
| Cost of debt | 4.5% - 7.0% | 5.75% |
| WACC | 7.3% - 10.2% | 8.7% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.67 | 0.89 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.0% | 11.2% |
| Tax rate | 4.7% | 8.9% |
| Debt/Equity ratio | 0.26 | 0.26 |
| Cost of debt | 4.5% | 7.0% |
| After-tax WACC | 7.3% | 10.2% |
| Selected WACC | 8.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| ELM.L | Elementis PLC | 0.26 | 1.12 | 0.9 |
| ACT.DE | AlzChem Group AG | 0.04 | 0.41 | 0.4 |
| BRG.OL | Borregaard ASA | 0.13 | 0.59 | 0.52 |
| GUR.SW | Gurit Holding AG | 0.15 | 1.1 | 0.96 |
| NTG.DE | Nabaltec AG | 0.67 | 0.69 | 0.42 |
| PCR.WA | PCC Rokita SA | 0.42 | 0.47 | 0.33 |
| RBT.PA | Robertet SA | 0.17 | 0.44 | 0.38 |
| SCPA.L | Scapa Group PLC | 0.23 | 1.55 | 1.28 |
| SEFER.PA | Sergeferrari Group SA | 2.38 | 0.99 | 0.3 |
| TET.L | Treatt PLC | 0.02 | 1.04 | 1.02 |
| Low | High | |
| Unlevered beta | 0.41 | 0.67 |
| Relevered beta | 0.51 | 0.84 |
| Adjusted relevered beta | 0.67 | 0.89 |
ELM.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 ELM.L:
cost_of_equity (9.60%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.67) + 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.