INS.L WACC - Weighted Average Cost of Capital

The WACC of Instem PLC (INS.L) is 8.4%.

The Cost of Equity of Instem PLC (INS.L) is 8.00%.

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

	Range	Selected
Cost of equity	6.10% - 9.90%	8.00%
Tax rate	11.90% - 13.40%	12.65%
Cost of debt	4.60% - 141.50%	73.05%
WACC	6.1% - 10.7%	8.4%

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	0.36	0.71

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.10%	9.90%

Tax rate	11.90%	13.40%
Debt/Equity ratio	0.01	0.01
Cost of debt	4.60%	141.50%

After-tax WACC	6.1%	10.7%


Selected WACC	8.4%

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 (8.00%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.36) + 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.