GBG.L
GB Group PLC
Price:  
280.00 
GBP
Volume:  
3,398,562.00
United Kingdom | Software
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GBG.L WACC - Weighted Average Cost of Capital

The WACC of GB Group PLC (GBG.L) is 8.2%.

The Cost of Equity of GB Group PLC (GBG.L) is 8.30%.
The Cost of Debt of GB Group PLC (GBG.L) is 9.15%.

Range Selected
Cost of equity 6.60% - 10.00% 8.30%
Tax rate 11.90% - 19.10% 15.50%
Cost of debt 6.20% - 12.10% 9.15%
WACC 6.4% - 9.9% 8.2%
WACC

GBG.L WACC calculation

Category Low High
Long-term bond rate 4.0% 4.5%
Equity market risk premium 6.0% 7.0%
Adjusted beta 0.43 0.71
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.60% 10.00%
Tax rate 11.90% 19.10%
Debt/Equity ratio 0.16 0.16
Cost of debt 6.20% 12.10%
After-tax WACC 6.4% 9.9%
Selected WACC 8.2%

GBG.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 GBG.L:

cost_of_equity (8.30%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.43) + 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.