KIE.L WACC - Weighted Average Cost of Capital

The WACC of Kier Group PLC (KIE.L) is 8.1%.

The Cost of Equity of Kier Group PLC (KIE.L) is 14.50%.

The Cost of Debt of Kier Group PLC (KIE.L) is 5.85%.

	Range	Selected
Cost of equity	11.60% - 17.40%	14.50%
Tax rate	23.20% - 25.90%	24.55%
Cost of debt	4.60% - 7.10%	5.85%
WACC	6.5% - 9.7%	8.1%

WACC

KIE.L WACC calculation

Category	Low	High

Long-term bond rate	4.0%	4.5%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.27	1.77

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.60%	17.40%

Tax rate	23.20%	25.90%
Debt/Equity ratio	1.75	1.75
Cost of debt	4.60%	7.10%

After-tax WACC	6.5%	9.7%


Selected WACC	8.1%

KIE.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 KIE.L:

cost_of_equity (14.50%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (1.27) + 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.