G4M.L WACC - Weighted Average Cost of Capital
The WACC of Gear4music Holdings PLC (G4M.L) is 6.7%.
| Range | Selected | |
| Cost of equity | 6.3% - 8.0% | 7.15% |
| Tax rate | 15.0% - 19.8% | 17.4% |
| Cost of debt | 5.5% - 9.2% | 7.35% |
| WACC | 5.7% - 7.8% | 6.7% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.39 | 0.44 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.3% | 8.0% |
| Tax rate | 15.0% | 19.8% |
| Debt/Equity ratio | 0.66 | 0.66 |
| Cost of debt | 5.5% | 9.2% |
| After-tax WACC | 5.7% | 7.8% |
| Selected WACC | 6.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| G4M.L | Gear4music Holdings PLC | 0.66 | 1.61 | 1.04 |
| ALEMV.PA | Emova Group SA | 3.49 | 0 | 0 |
| IPO.WA | Intersport Polska SA | 1.03 | 0.29 | 0.15 |
| LYKO A.ST | Lyko Group AB (publ) | 0.64 | 0.83 | 0.54 |
| MUSTI.HE | Musti Group Oyj | 0.27 | 0.07 | 0.06 |
| NAKAS.AT | Philippos Nakas SA | 0.25 | 0.08 | 0.07 |
| OXY.WA | Oxygen SA | 0.13 | 0 | 0 |
| SCHO.L | Scholium Group PLC | 0.38 | -0.06 | -0.05 |
| SGI.L | Stanley Gibbons Group PLC | 3.42 | 1.23 | 0.32 |
| WRKS.L | Works co uk PLC | 4.61 | 0.28 | 0.06 |
| Low | High | |
| Unlevered beta | 0.06 | 0.1 |
| Relevered beta | 0.09 | 0.16 |
| Adjusted relevered beta | 0.39 | 0.44 |
G4M.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 G4M.L:
cost_of_equity (7.15%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.39) + 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.