INS.L
Instem PLC
Price:  
830.00 
GBP
Volume:  
3,645.00
United Kingdom | Health Care Technology
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INS.L WACC - Weighted Average Cost of Capital

The WACC of Instem PLC (INS.L) is 8.1%.

The Cost of Equity of Instem PLC (INS.L) is 7.70%.
The Cost of Debt of Instem PLC (INS.L) is 73.05%.

Range Selected
Cost of equity 6.40% - 9.00% 7.70%
Tax rate 11.90% - 13.40% 12.65%
Cost of debt 4.60% - 141.50% 73.05%
WACC 6.4% - 9.8% 8.1%
WACC

INS.L WACC calculation

Category Low High
Long-term bond rate 4.0% 4.5%
Equity market risk premium 6.0% 7.0%
Adjusted beta 0.41 0.58
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.40% 9.00%
Tax rate 11.90% 13.40%
Debt/Equity ratio 0.01 0.01
Cost of debt 4.60% 141.50%
After-tax WACC 6.4% 9.8%
Selected WACC 8.1%

INS.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 INS.L:

cost_of_equity (7.70%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.41) + 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.