The WACC of Intosol Holdings PLC (INTO.L) is 7.4%.
| Range | Selected | |
| Cost of equity | 22.40% - 29.50% | 25.95% |
| Tax rate | 19.00% - 19.00% | 19.00% |
| Cost of debt | 5.00% - 5.00% | 5.00% |
| WACC | 6.8% - 7.9% | 7.4% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 5.3% | 6.3% |
| Adjusted beta | 3.65 | 4.03 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 22.40% | 29.50% |
| Tax rate | 19.00% | 19.00% |
| Debt/Equity ratio | 5.58 | 5.58 |
| Cost of debt | 5.00% | 5.00% |
| After-tax WACC | 6.8% | 7.9% |
| Selected WACC | 7.4% | |
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 INTO.L:
cost_of_equity (25.95%) = risk_free_rate (3.15%) + equity_risk_premium (5.80%) * adjusted_beta (3.65) + 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.