The WACC of Esken Ltd (ESKN.L) is 8.3%.
| Range | Selected | |
| Cost of equity | 1,073.00% - 1,907.30% | 1,490.15% |
| Tax rate | 7.80% - 11.80% | 9.80% |
| Cost of debt | 4.50% - 7.00% | 5.75% |
| WACC | 6.4% - 10.2% | 8.3% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 178.76 | 272.53 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 1,073.00% | 1,907.30% |
| Tax rate | 7.80% | 11.80% |
| Debt/Equity ratio | 475.98 | 475.98 |
| Cost of debt | 4.50% | 7.00% |
| After-tax WACC | 6.4% | 10.2% |
| Selected WACC | 8.3% | |
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 ESKN.L:
cost_of_equity (1,490.15%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (178.76) + 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.