IKA.L
Ilika PLC
Price:  
39.00 
GBP
Volume:  
147,494.00
United Kingdom | Electrical Equipment
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IKA.L WACC - Weighted Average Cost of Capital

The WACC of Ilika PLC (IKA.L) is 7.7%.

The Cost of Equity of Ilika PLC (IKA.L) is 7.65%.
The Cost of Debt of Ilika PLC (IKA.L) is 7.20%.

Range Selected
Cost of equity 6.20% - 9.10% 7.65%
Tax rate 14.90% - 17.20% 16.05%
Cost of debt 7.00% - 7.40% 7.20%
WACC 6.2% - 9.1% 7.7%
WACC

IKA.L WACC calculation

Category Low High
Long-term bond rate 4.0% 4.5%
Equity market risk premium 6.0% 7.0%
Adjusted beta 0.38 0.59
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.20% 9.10%
Tax rate 14.90% 17.20%
Debt/Equity ratio 0.01 0.01
Cost of debt 7.00% 7.40%
After-tax WACC 6.2% 9.1%
Selected WACC 7.7%

IKA.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 IKA.L:

cost_of_equity (7.65%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.38) + 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.