III.L
3i Group PLC
Price:  
4,150.00 
GBP
Volume:  
876,732.00
United Kingdom | Capital Markets
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III.L WACC - Weighted Average Cost of Capital

The WACC of 3i Group PLC (III.L) is 11.1%.

The Cost of Equity of 3i Group PLC (III.L) is 11.30%.
The Cost of Debt of 3i Group PLC (III.L) is 4.85%.

Range Selected
Cost of equity 10.10% - 12.50% 11.30%
Tax rate -% - -% -%
Cost of debt 4.60% - 5.10% 4.85%
WACC 9.9% - 12.3% 11.1%
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 1.08
Additional risk adjustments 0.0% 0.5%
Cost of equity 10.10% 12.50%
Tax rate -% -%
Debt/Equity ratio 0.03 0.03
Cost of debt 4.60% 5.10%
After-tax WACC 9.9% 12.3%
Selected WACC 11.1%

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 (11.30%) = 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.