GYM.L WACC - Weighted Average Cost of Capital

The WACC of GYM Group PLC (GYM.L) is 8.0%.

The Cost of Equity of GYM Group PLC (GYM.L) is 7.50%.

The Cost of Debt of GYM Group PLC (GYM.L) is 10.25%.

	Range	Selected
Cost of equity	6.20% - 8.80%	7.50%
Tax rate	12.40% - 21.10%	16.75%
Cost of debt	4.70% - 15.80%	10.25%
WACC	4.9% - 11.0%	8.0%

WACC

GYM.L WACC calculation

Category	Low	High

Long-term bond rate	4.0%	4.5%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.36	0.55

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.20%	8.80%

Tax rate	12.40%	21.10%
Debt/Equity ratio	1.49	1.49
Cost of debt	4.70%	15.80%

After-tax WACC	4.9%	11.0%


Selected WACC	8.0%

GYM.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 GYM.L:

cost_of_equity (7.50%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.36) + 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.