The WACC of Ince Group PLC (INCE.L) is 5.0%.
| Range | Selected | |
| Cost of equity | 6.10% - 7.70% | 6.90% |
| Tax rate | 13.00% - 22.60% | 17.80% |
| Cost of debt | 4.90% - 4.90% | 4.90% |
| WACC | 4.9% - 5.1% | 5.0% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 5.5% | 6.5% |
| Adjusted beta | 0.39 | 0.42 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.10% | 7.70% |
| Tax rate | 13.00% | 22.60% |
| Debt/Equity ratio | 1.99 | 1.99 |
| Cost of debt | 4.90% | 4.90% |
| After-tax WACC | 4.9% | 5.1% |
| Selected WACC | 5.0% | |
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 INCE.L:
cost_of_equity (6.90%) = risk_free_rate (4.25%) + equity_risk_premium (6.00%) * adjusted_beta (0.39) + 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.