FSTA.L WACC - Weighted Average Cost of Capital

The WACC of Fuller Smith & Turner PLC (FSTA.L) is 6.9%.

The Cost of Equity of Fuller Smith & Turner PLC (FSTA.L) is 9.45%.

The Cost of Debt of Fuller Smith & Turner PLC (FSTA.L) is 4.60%.

	Range	Selected
Cost of equity	8.20% - 10.70%	9.45%
Tax rate	21.80% - 28.70%	25.25%
Cost of debt	4.00% - 5.20%	4.60%
WACC	6.1% - 7.8%	6.9%

WACC

FSTA.L WACC calculation

Category	Low	High

Long-term bond rate	4.0%	4.5%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.7	0.82

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.20%	10.70%

Tax rate	21.80%	28.70%
Debt/Equity ratio	0.72	0.72
Cost of debt	4.00%	5.20%

After-tax WACC	6.1%	7.8%


Selected WACC	6.9%

FSTA.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 FSTA.L:

cost_of_equity (9.45%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.7) + 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.