JEL.L WACC - Weighted Average Cost of Capital
The WACC of Jersey Electricity PLC (JEL.L) is 7.0%.
| Range | Selected | |
| Cost of equity | 6.9% - 9.0% | 7.95% |
| Tax rate | 20.6% - 21.6% | 21.1% |
| Cost of debt | 4.0% - 4.6% | 4.3% |
| WACC | 6.1% - 7.8% | 7.0% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.48 | 0.57 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.9% | 9.0% |
| Tax rate | 20.6% | 21.6% |
| Debt/Equity ratio | 0.26 | 0.26 |
| Cost of debt | 4.0% | 4.6% |
| After-tax WACC | 6.1% | 7.8% |
| Selected WACC | 7.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| JEL.L | Jersey Electricity PLC | 0.26 | 0.22 | 0.18 |
| Low | High | |
| Unlevered beta | 0.18 | 0.18 |
| Relevered beta | 0.22 | 0.36 |
| Adjusted relevered beta | 0.48 | 0.57 |
JEL.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 JEL.L:
cost_of_equity (7.95%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.48) + 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.