The WACC of Jarvis Securities PLC (JIM.L) is 13601.7%.
| Range | Selected | |
| Cost of equity | 23.50% - 99.60% | 61.55% |
| Tax rate | 18.60% - 20.80% | 19.70% |
| Cost of debt | 5.20% - 34,416.50% | 17,210.85% |
| WACC | 4.3% - 27199.0% | 13601.7% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 3.26 | 13.56 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 23.50% | 99.60% |
| Tax rate | 18.60% | 20.80% |
| Debt/Equity ratio | 485.52 | 485.52 |
| Cost of debt | 5.20% | 34,416.50% |
| After-tax WACC | 4.3% | 27199.0% |
| Selected WACC | 13601.7% | |
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 JIM.L:
cost_of_equity (61.55%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (3.26) + 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.