FIF.L WACC - Weighted Average Cost of Capital

The WACC of Finsbury Food Group PLC (FIF.L) is 7.8%.

The Cost of Equity of Finsbury Food Group PLC (FIF.L) is 9.15%.

The Cost of Debt of Finsbury Food Group PLC (FIF.L) is 4.70%.

	Range	Selected
Cost of equity	7.30% - 11.00%	9.15%
Tax rate	22.40% - 26.40%	24.40%
Cost of debt	4.70% - 4.70%	4.70%
WACC	6.4% - 9.1%	7.8%

WACC

FIF.L WACC calculation

Category	Low	High

Long-term bond rate	4.0%	4.5%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.56	0.86

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.30%	11.00%

Tax rate	22.40%	26.40%
Debt/Equity ratio	0.33	0.33
Cost of debt	4.70%	4.70%

After-tax WACC	6.4%	9.1%


Selected WACC	7.8%

FIF.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 FIF.L:

cost_of_equity (9.15%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.56) + 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.