FRAS.L
Frasers Group PLC
Price:  
691.5 
GBP
Volume:  
233,911
United Kingdom | Specialty Retail

FRAS.L WACC - Weighted Average Cost of Capital

The WACC of Frasers Group PLC (FRAS.L) is 8.3%.

The Cost of Equity of Frasers Group PLC (FRAS.L) is 10.9%.
The Cost of Debt of Frasers Group PLC (FRAS.L) is 4.45%.

RangeSelected
Cost of equity9.3% - 12.5%10.9%
Tax rate24.8% - 26.8%25.8%
Cost of debt4.0% - 4.9%4.45%
WACC7.1% - 9.5%8.3%
WACC

FRAS.L WACC calculation

CategoryLowHigh
Long-term bond rate4.0%4.5%
Equity market risk premium6.0%7.0%
Adjusted beta0.881.07
Additional risk adjustments0.0%0.5%
Cost of equity9.3%12.5%
Tax rate24.8%26.8%
Debt/Equity ratio
0.510.51
Cost of debt4.0%4.9%
After-tax WACC7.1%9.5%
Selected WACC8.3%

FRAS.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 FRAS.L:

cost_of_equity (10.90%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.88) + 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.