GENL.L WACC - Weighted Average Cost of Capital

The WACC of Genel Energy PLC (GENL.L) is 7.9%.

The Cost of Equity of Genel Energy PLC (GENL.L) is 7.90%.

The Cost of Debt of Genel Energy PLC (GENL.L) is 7.85%.

	Range	Selected
Cost of equity	6.80% - 9.00%	7.90%
Tax rate	0.10% - 0.20%	0.15%
Cost of debt	7.00% - 8.70%	7.85%
WACC	6.8% - 8.9%	7.9%

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	0.46	0.58

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.80%	9.00%

Tax rate	0.10%	0.20%
Debt/Equity ratio	0.33	0.33
Cost of debt	7.00%	8.70%

After-tax WACC	6.8%	8.9%


Selected WACC	7.9%

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 (7.90%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.46) + 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.