IKA.L
Ilika PLC
Price:  
40.50 
GBP
Volume:  
163,023.00
United Kingdom | Electrical Equipment
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IKA.L WACC - Weighted Average Cost of Capital

The WACC of Ilika PLC (IKA.L) is 7.0%.

The Cost of Equity of Ilika PLC (IKA.L) is 7.05%.
The Cost of Debt of Ilika PLC (IKA.L) is 5.50%.

Range Selected
Cost of equity 6.00% - 8.10% 7.05%
Tax rate 10.70% - 14.10% 12.40%
Cost of debt 4.00% - 7.00% 5.50%
WACC 6.0% - 8.1% 7.0%
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 0.33 0.45
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.00% 8.10%
Tax rate 10.70% 14.10%
Debt/Equity ratio 0.01 0.01
Cost of debt 4.00% 7.00%
After-tax WACC 6.0% 8.1%
Selected WACC 7.0%

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 (7.05%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.33) + 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.