GOG.L
Go-Ahead Group PLC
Price:  
1,546.00 
GBP
Volume:  
94,939.00
United Kingdom | Road & Rail
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GOG.L WACC - Weighted Average Cost of Capital

The WACC of Go-Ahead Group PLC (GOG.L) is 6.0%.

The Cost of Equity of Go-Ahead Group PLC (GOG.L) is 8.85%.
The Cost of Debt of Go-Ahead Group PLC (GOG.L) is 4.60%.

Range Selected
Cost of equity 6.90% - 10.80% 8.85%
Tax rate 24.00% - 26.50% 25.25%
Cost of debt 4.00% - 5.20% 4.60%
WACC 4.9% - 7.2% 6.0%
WACC

GOG.L WACC calculation

Category Low High
Long-term bond rate 4.0% 4.5%
Equity market risk premium 6.0% 7.0%
Adjusted beta 0.48 0.83
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.90% 10.80%
Tax rate 24.00% 26.50%
Debt/Equity ratio 1.06 1.06
Cost of debt 4.00% 5.20%
After-tax WACC 4.9% 7.2%
Selected WACC 6.0%

GOG.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 GOG.L:

cost_of_equity (8.85%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.48) + 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.