FRAN.L WACC - Weighted Average Cost of Capital
The WACC of Franchise Brands PLC (FRAN.L) is 12.5%.
| Range | Selected | |
| Cost of equity | 7.2% - 9.2% | 8.2% |
| Tax rate | 22.9% - 25.2% | 24.05% |
| Cost of debt | 7.1% - 63.4% | 35.25% |
| WACC | 6.8% - 18.2% | 12.5% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.53 | 0.6 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.2% | 9.2% |
| Tax rate | 22.9% | 25.2% |
| Debt/Equity ratio | 0.31 | 0.31 |
| Cost of debt | 7.1% | 63.4% |
| After-tax WACC | 6.8% | 18.2% |
| Selected WACC | 12.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| FRAN.L | Franchise Brands PLC | 0.31 | 0.61 | 0.5 |
| ANX.L | Anexo Group PLC | 0.97 | 0.28 | 0.16 |
| AUX.WA | Auxilia SA | 0.11 | 1.65 | 1.52 |
| CFI.WA | CFI Holding SA | 0.66 | 0.37 | 0.24 |
| DTY.L | Dignity PLC | 2.15 | 0.76 | 0.29 |
| EIK.IC | Eik fasteignafelag hf | 1.92 | 0.92 | 0.37 |
| FC9.DE | FCR Immobilien AG | 0.65 | 0.36 | 0.24 |
| ISGYO.IS | Is Gayrimenkul Yatirim Ortakligi AS | 0.27 | 1.01 | 0.84 |
| LIVI.ST | Liv ihop AB (publ) | 0.59 | -0.2 | -0.14 |
| PHN.WA | Polski Holding Nieruchomosci SA | 3.66 | 0.44 | 0.12 |
| Low | High | |
| Unlevered beta | 0.24 | 0.32 |
| Relevered beta | 0.3 | 0.4 |
| Adjusted relevered beta | 0.53 | 0.6 |
FRAN.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 FRAN.L:
cost_of_equity (8.20%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.53) + 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.