FIH.L
FIH Group PLC
Price:  
162.50 
GBP
Volume:  
15,041.00
United Kingdom | Commercial Services & Supplies
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FIH.L WACC - Weighted Average Cost of Capital

The WACC of FIH Group PLC (FIH.L) is 5.5%.

The Cost of Equity of FIH Group PLC (FIH.L) is 6.85%.
The Cost of Debt of FIH Group PLC (FIH.L) is 5.50%.

Range Selected
Cost of equity 5.60% - 8.10% 6.85%
Tax rate 24.30% - 26.70% 25.50%
Cost of debt 4.00% - 7.00% 5.50%
WACC 4.4% - 6.7% 5.5%
WACC

FIH.L WACC calculation

Category Low High
Long-term bond rate 4.0% 4.5%
Equity market risk premium 6.0% 7.0%
Adjusted beta 0.27 0.44
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.60% 8.10%
Tax rate 24.30% 26.70%
Debt/Equity ratio 0.92 0.92
Cost of debt 4.00% 7.00%
After-tax WACC 4.4% 6.7%
Selected WACC 5.5%

FIH.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 FIH.L:

cost_of_equity (6.85%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.27) + 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.