FEVR.L
Fevertree Drinks PLC
Price:  
822.00 
GBP
Volume:  
344,387.00
United Kingdom | Beverages
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FEVR.L WACC - Weighted Average Cost of Capital

The WACC of Fevertree Drinks PLC (FEVR.L) is 9.2%.

The Cost of Equity of Fevertree Drinks PLC (FEVR.L) is 9.30%.
The Cost of Debt of Fevertree Drinks PLC (FEVR.L) is 4.30%.

Range Selected
Cost of equity 8.10% - 10.50% 9.30%
Tax rate 19.70% - 24.10% 21.90%
Cost of debt 4.00% - 4.60% 4.30%
WACC 8.1% - 10.4% 9.2%
WACC

FEVR.L WACC calculation

Category Low High
Long-term bond rate 4.0% 4.5%
Equity market risk premium 6.0% 7.0%
Adjusted beta 0.69 0.79
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.10% 10.50%
Tax rate 19.70% 24.10%
Debt/Equity ratio 0.01 0.01
Cost of debt 4.00% 4.60%
After-tax WACC 8.1% 10.4%
Selected WACC 9.2%

FEVR.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 FEVR.L:

cost_of_equity (9.30%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.69) + 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.