III.L WACC - Weighted Average Cost of Capital

The WACC of 3i Group PLC (III.L) is 11.3%.

The Cost of Equity of 3i Group PLC (III.L) is 11.45%.

The Cost of Debt of 3i Group PLC (III.L) is 5.25%.

	Range	Selected
Cost of equity	10.10% - 12.80%	11.45%
Tax rate	-% - 0.10%	0.05%
Cost of debt	4.60% - 5.90%	5.25%
WACC	9.9% - 12.6%	11.3%

WACC

III.L WACC calculation

Category	Low	High

Long-term bond rate	4.0%	4.5%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.02	1.12

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.10%	12.80%

Tax rate	-%	0.10%
Debt/Equity ratio	0.03	0.03
Cost of debt	4.60%	5.90%

After-tax WACC	9.9%	12.6%


Selected WACC	11.3%

III.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 III.L:

cost_of_equity (11.45%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (1.02) + 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.