IMB.L WACC - Weighted Average Cost of Capital
The WACC of Imperial Brands PLC (IMB.L) is 7.6%.
| Range | Selected | |
| Cost of equity | 7.4% - 11.0% | 9.2% |
| Tax rate | 16.7% - 23.9% | 20.3% |
| Cost of debt | 4.0% - 4.9% | 4.45% |
| WACC | 6.2% - 8.9% | 7.6% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.57 | 0.85 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.4% | 11.0% |
| Tax rate | 16.7% | 23.9% |
| Debt/Equity ratio | 0.4 | 0.4 |
| Cost of debt | 4.0% | 4.9% |
| After-tax WACC | 6.2% | 8.9% |
| Selected WACC | 7.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| IMB.L | Imperial Brands PLC | 0.4 | 0.3 | 0.23 |
| BATS.L | British American Tobacco PLC | 0.5 | 0.39 | 0.28 |
| CON.DE | Continental AG | 0.46 | 1.27 | 0.93 |
| ENR.DE | Siemens Energy AG | 0.06 | 1.41 | 1.35 |
| KARE.AT | Karelia Tobacco Company Inc SA | 0 | 0.16 | 0.16 |
| STG.CO | Scandinavian Tobacco Group A/S | 0.74 | 0.21 | 0.13 |
| SWMA.ST | Swedish Match AB | 0.09 | 0.27 | 0.25 |
| TABAK.PR | Philip Morris CR as | 0.01 | 0.38 | 0.37 |
| VOLV B.ST | Volvo AB | 0.48 | 1.4 | 1.02 |
| TRIP.CN | Red Light Holland Corp | 0.14 | 1.37 | 1.24 |
| Low | High | |
| Unlevered beta | 0.27 | 0.6 |
| Relevered beta | 0.36 | 0.78 |
| Adjusted relevered beta | 0.57 | 0.85 |
IMB.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 IMB.L:
cost_of_equity (9.20%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.57) + 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.