FLK.L WACC - Weighted Average Cost of Capital
The WACC of Fletcher King PLC (FLK.L) is 8.6%.
| Range | Selected | |
| Cost of equity | 7.7% - 10.3% | 9% |
| Tax rate | 19.9% - 27.7% | 23.8% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 7.4% - 9.8% | 8.6% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.62 | 0.76 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.7% | 10.3% |
| Tax rate | 19.9% | 27.7% |
| Debt/Equity ratio | 0.08 | 0.08 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 7.4% | 9.8% |
| Selected WACC | 8.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| FLK.L | Fletcher King PLC | 0.08 | 0.45 | 0.42 |
| A4Y.DE | Accentro Real Estate AG | 81.64 | 1.91 | 0.03 |
| ASTAK.AT | Alpha Astika Akinita SA | 0.02 | 0.38 | 0.38 |
| BLV.L | Belvoir Group PLC | 0.02 | 0.41 | 0.41 |
| DKE.L | Dukemount Capital PLC | 2.51 | 2.07 | 0.69 |
| FOXT.L | Foxtons Group PLC | 0.32 | 1.04 | 0.83 |
| LSL.L | LSL Property Services PLC | 0.11 | 0.58 | 0.53 |
| MIPAZ.IS | Milpa Ticari ve Sinai Urunler Pazarlama Sanayi ve Ticaret AS | 0 | 1.04 | 1.04 |
| PURP.L | Purplebricks Group PLC | 6.1 | 0.77 | 0.13 |
| SVS.L | Savills PLC | 0.45 | 1.22 | 0.9 |
| Low | High | |
| Unlevered beta | 0.41 | 0.6 |
| Relevered beta | 0.43 | 0.64 |
| Adjusted relevered beta | 0.62 | 0.76 |
FLK.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 FLK.L:
cost_of_equity (9.00%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.62) + 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.