KNOS.L WACC - Weighted Average Cost of Capital

The WACC of Kainos Group PLC (KNOS.L) is 9.4%.

The Cost of Equity of Kainos Group PLC (KNOS.L) is 9.45%.

The Cost of Debt of Kainos Group PLC (KNOS.L) is 6.55%.

	Range	Selected
Cost of equity	8.10% - 10.80%	9.45%
Tax rate	22.90% - 23.90%	23.40%
Cost of debt	4.60% - 8.50%	6.55%
WACC	8.1% - 10.8%	9.4%

WACC

KNOS.L WACC calculation

Category	Low	High

Long-term bond rate	4.0%	4.5%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.69	0.84

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.10%	10.80%

Tax rate	22.90%	23.90%
Debt/Equity ratio	0	0
Cost of debt	4.60%	8.50%

After-tax WACC	8.1%	10.8%


Selected WACC	9.4%

KNOS.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 KNOS.L:

cost_of_equity (9.45%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.69) + 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.