IDE.L
IDE Group Holdings PLC
Price:  
67.5 
GBP
Volume:  
19,991
United Kingdom | IT Services

IDE.L WACC - Weighted Average Cost of Capital

The WACC of IDE Group Holdings PLC (IDE.L) is 6.9%.

The Cost of Equity of IDE Group Holdings PLC (IDE.L) is 12.45%.
The Cost of Debt of IDE Group Holdings PLC (IDE.L) is 5%.

RangeSelected
Cost of equity10.9% - 14.0%12.45%
Tax rate37.4% - 45.4%41.4%
Cost of debt4.0% - 6.0%5%
WACC6.0% - 7.8%6.9%
WACC

IDE.L WACC calculation

CategoryLowHigh
Long-term bond rate4.4%4.9%
Equity market risk premium6.4%7.4%
Adjusted beta11.15
Additional risk adjustments0.0%0.5%
Cost of equity10.9%14.0%
Tax rate37.4%45.4%
Debt/Equity ratio
1.371.37
Cost of debt4.0%6.0%
After-tax WACC6.0%7.8%
Selected WACC6.9%

IDE.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 IDE.L:

cost_of_equity (12.45%) = risk_free_rate (4.65%) + equity_risk_premium (6.90%) * adjusted_beta (1) + 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.