JSG.L
Johnson Service Group PLC
Price:  
146.60 
GBP
Volume:  
904,845.00
United Kingdom | Commercial Services & Supplies
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JSG.L WACC - Weighted Average Cost of Capital

The WACC of Johnson Service Group PLC (JSG.L) is 8.1%.

The Cost of Equity of Johnson Service Group PLC (JSG.L) is 8.80%.
The Cost of Debt of Johnson Service Group PLC (JSG.L) is 6.25%.

Range Selected
Cost of equity 7.70% - 9.90% 8.80%
Tax rate 21.40% - 25.90% 23.65%
Cost of debt 4.90% - 7.60% 6.25%
WACC 7.1% - 9.1% 8.1%
WACC

JSG.L WACC calculation

Category Low High
Long-term bond rate 4.0% 4.5%
Equity market risk premium 6.0% 7.0%
Adjusted beta 0.62 0.7
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.70% 9.90%
Tax rate 21.40% 25.90%
Debt/Equity ratio 0.21 0.21
Cost of debt 4.90% 7.60%
After-tax WACC 7.1% 9.1%
Selected WACC 8.1%

JSG.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 JSG.L:

cost_of_equity (8.80%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.62) + 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.