ESNT.L
Essentra PLC
Price:  
110.00 
GBP
Volume:  
549,513.00
United Kingdom | Chemicals
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ESNT.L WACC - Weighted Average Cost of Capital

The WACC of Essentra PLC (ESNT.L) is 7.1%.

The Cost of Equity of Essentra PLC (ESNT.L) is 9.00%.
The Cost of Debt of Essentra PLC (ESNT.L) is 4.60%.

Range Selected
Cost of equity 7.40% - 10.60% 9.00%
Tax rate 31.00% - 44.00% 37.50%
Cost of debt 4.60% - 4.60% 4.60%
WACC 6.1% - 8.1% 7.1%
WACC

ESNT.L WACC calculation

Category Low High
Long-term bond rate 4.0% 4.5%
Equity market risk premium 6.0% 7.0%
Adjusted beta 0.57 0.8
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.40% 10.60%
Tax rate 31.00% 44.00%
Debt/Equity ratio 0.45 0.45
Cost of debt 4.60% 4.60%
After-tax WACC 6.1% 8.1%
Selected WACC 7.1%

ESNT.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 ESNT.L:

cost_of_equity (9.00%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.57) + 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.