GLE.L WACC - Weighted Average Cost of Capital

The WACC of MJ Gleeson PLC (GLE.L) is 10.4%.

The Cost of Equity of MJ Gleeson PLC (GLE.L) is 9.15%.

The Cost of Debt of MJ Gleeson PLC (GLE.L) is 38.90%.

	Range	Selected
Cost of equity	7.90% - 10.40%	9.15%
Tax rate	21.70% - 22.60%	22.15%
Cost of debt	15.80% - 62.00%	38.90%
WACC	8.2% - 12.5%	10.4%

WACC

GLE.L WACC calculation

Category	Low	High

Long-term bond rate	4.0%	4.5%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.66	0.77

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.90%	10.40%

Tax rate	21.70%	22.60%
Debt/Equity ratio	0.06	0.06
Cost of debt	15.80%	62.00%

After-tax WACC	8.2%	12.5%


Selected WACC	10.4%

GLE.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 GLE.L:

cost_of_equity (9.15%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.66) + 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.