GENL.L WACC - Weighted Average Cost of Capital

The WACC of Genel Energy PLC (GENL.L) is 9.1%.

The Cost of Equity of Genel Energy PLC (GENL.L) is 9.35%.

The Cost of Debt of Genel Energy PLC (GENL.L) is 8.45%.

	Range	Selected
Cost of equity	6.90% - 11.80%	9.35%
Tax rate	0.20% - 0.40%	0.30%
Cost of debt	7.00% - 9.90%	8.45%
WACC	6.9% - 11.3%	9.1%

WACC

GENL.L WACC calculation

Category	Low	High

Long-term bond rate	4.0%	4.5%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.49	0.98

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.90%	11.80%

Tax rate	0.20%	0.40%
Debt/Equity ratio	0.32	0.32
Cost of debt	7.00%	9.90%

After-tax WACC	6.9%	11.3%


Selected WACC	9.1%

GENL.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 GENL.L:

cost_of_equity (9.35%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.49) + 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.