EZJ.L
Easyjet PLC
Price:  
520.2 
GBP
Volume:  
1,732,044
United Kingdom | Airlines

EZJ.L WACC - Weighted Average Cost of Capital

The WACC of Easyjet PLC (EZJ.L) is 7.5%.

The Cost of Equity of Easyjet PLC (EZJ.L) is 10.4%.
The Cost of Debt of Easyjet PLC (EZJ.L) is 4.9%.

RangeSelected
Cost of equity8.4% - 12.4%10.4%
Tax rate18.1% - 21.2%19.65%
Cost of debt4.6% - 5.2%4.9%
WACC6.3% - 8.7%7.5%
WACC

EZJ.L WACC calculation

CategoryLowHigh
Long-term bond rate4.0%4.5%
Equity market risk premium6.0%7.0%
Adjusted beta0.741.06
Additional risk adjustments0.0%0.5%
Cost of equity8.4%12.4%
Tax rate18.1%21.2%
Debt/Equity ratio
0.820.82
Cost of debt4.6%5.2%
After-tax WACC6.3%8.7%
Selected WACC7.5%

EZJ.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 EZJ.L:

cost_of_equity (10.40%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.74) + 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.