The WACC of Jubilee Metals Group PLC (JLP.L) is 14.0%.
| Range | Selected | |
| Cost of equity | 11.10% - 14.90% | 13.00% |
| Tax rate | 18.20% - 27.90% | 23.05% |
| Cost of debt | 15.80% - 30.30% | 23.05% |
| WACC | 11.5% - 16.5% | 14.0% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 1.19 | 1.41 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 11.10% | 14.90% |
| Tax rate | 18.20% | 27.90% |
| Debt/Equity ratio | 0.3 | 0.3 |
| Cost of debt | 15.80% | 30.30% |
| After-tax WACC | 11.5% | 16.5% |
| Selected WACC | 14.0% | |
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 JLP.L:
cost_of_equity (13.00%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (1.19) + 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.