The WACC of Filta Group Holdings PLC (FLTA.L) is 7.5%.
| Range | Selected | |
| Cost of equity | 5.40% - 9.60% | 7.50% |
| Tax rate | 28.10% - 38.90% | 33.50% |
| Cost of debt | 5.40% - 16.00% | 10.70% |
| WACC | 5.3% - 9.7% | 7.5% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 5.3% | 6.3% |
| Adjusted beta | 0.47 | 0.9 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.40% | 9.60% |
| Tax rate | 28.10% | 38.90% |
| Debt/Equity ratio | 0.12 | 0.12 |
| Cost of debt | 5.40% | 16.00% |
| After-tax WACC | 5.3% | 9.7% |
| Selected WACC | 7.5% | |
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 FLTA.L:
cost_of_equity (7.50%) = risk_free_rate (3.15%) + equity_risk_premium (5.80%) * adjusted_beta (0.47) + 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.