FRAS.L
Frasers Group PLC
Price:  
681.00 
GBP
Volume:  
73,367.00
United Kingdom | Specialty Retail
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FRAS.L WACC - Weighted Average Cost of Capital

The WACC of Frasers Group PLC (FRAS.L) is 8.4%.

The Cost of Equity of Frasers Group PLC (FRAS.L) is 10.85%.
The Cost of Debt of Frasers Group PLC (FRAS.L) is 4.55%.

Range Selected
Cost of equity 9.20% - 12.50% 10.85%
Tax rate 24.50% - 24.80% 24.65%
Cost of debt 4.00% - 5.10% 4.55%
WACC 7.2% - 9.7% 8.4%
WACC

FRAS.L WACC calculation

Category Low High
Long-term bond rate 4.0% 4.5%
Equity market risk premium 6.0% 7.0%
Adjusted beta 0.88 1.08
Additional risk adjustments 0.0% 0.5%
Cost of equity 9.20% 12.50%
Tax rate 24.50% 24.80%
Debt/Equity ratio 0.49 0.49
Cost of debt 4.00% 5.10%
After-tax WACC 7.2% 9.7%
Selected WACC 8.4%

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 (10.85%) = 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.