INSE.L WACC - Weighted Average Cost of Capital

The WACC of Inspired Energy PLC (INSE.L) is 8.5%.

The Cost of Equity of Inspired Energy PLC (INSE.L) is 10.50%.

The Cost of Debt of Inspired Energy PLC (INSE.L) is 6.25%.

	Range	Selected
Cost of equity	8.60% - 12.40%	10.50%
Tax rate	13.00% - 16.90%	14.95%
Cost of debt	5.50% - 7.00%	6.25%
WACC	7.2% - 9.9%	8.5%

WACC

INSE.L WACC calculation

Category	Low	High

Long-term bond rate	4.0%	4.5%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.77	1.06

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.60%	12.40%

Tax rate	13.00%	16.90%
Debt/Equity ratio	0.61	0.61
Cost of debt	5.50%	7.00%

After-tax WACC	7.2%	9.9%


Selected WACC	8.5%

INSE.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 INSE.L:

cost_of_equity (10.50%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.77) + 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.