ERM.L WACC - Weighted Average Cost of Capital
The WACC of Euromoney Institutional Investor PLC (ERM.L) is 6.8%.
| Range | Selected | |
| Cost of equity | 6.0% - 7.8% | 6.9% |
| Tax rate | 19.0% - 31.2% | 25.1% |
| Cost of debt | 4.6% - 4.6% | 4.6% |
| WACC | 5.9% - 7.7% | 6.8% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.33 | 0.41 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.0% | 7.8% |
| Tax rate | 19.0% | 31.2% |
| Debt/Equity ratio | 0.04 | 0.04 |
| Cost of debt | 4.6% | 4.6% |
| After-tax WACC | 5.9% | 7.7% |
| Selected WACC | 6.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| ERM.L | Euromoney Institutional Investor PLC | 0.04 | 0.99 | 0.96 |
| ALMA.HE | Alma Media Oyj | 0.18 | 0.28 | 0.25 |
| CAU.L | Centaur Media PLC | 0.03 | -0.21 | -0.21 |
| CLE.MI | Class Editori SpA | 1.88 | 0.02 | 0.01 |
| MON.MI | Monrif SpA | 9.78 | 0.19 | 0.02 |
| POL.OL | Polaris Media ASA | 0.13 | -0.02 | -0.02 |
| QRT.L | Quarto Group Inc | 0.28 | -0.21 | -0.17 |
| ROU.BR | Roularta Media Group NV | 0.04 | -0.22 | -0.22 |
| STORY B.ST | Storytel AB (publ) | 0.11 | 0.54 | 0.5 |
| VOC.MC | Vocento SA | 0.94 | 0.61 | 0.36 |
| Low | High | |
| Unlevered beta | 0 | 0.11 |
| Relevered beta | 0 | 0.12 |
| Adjusted relevered beta | 0.33 | 0.41 |
ERM.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 ERM.L:
cost_of_equity (6.90%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.33) + 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.