MAB.L
Mitchells & Butlers PLC
Price:  
266.00 
GBP
Volume:  
269,080.00
United Kingdom | Hotels, Restaurants & Leisure
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MAB.L WACC - Weighted Average Cost of Capital

The WACC of Mitchells & Butlers PLC (MAB.L) is 8.1%.

The Cost of Equity of Mitchells & Butlers PLC (MAB.L) is 11.00%.
The Cost of Debt of Mitchells & Butlers PLC (MAB.L) is 6.50%.

Range Selected
Cost of equity 9.60% - 12.40% 11.00%
Tax rate 19.00% - 19.00% 19.00%
Cost of debt 5.90% - 7.10% 6.50%
WACC 7.1% - 9.0% 8.1%
WACC

MAB.L WACC calculation

Category Low High
Long-term bond rate 4.0% 4.5%
Equity market risk premium 6.0% 7.0%
Adjusted beta 0.94 1.06
Additional risk adjustments 0.0% 0.5%
Cost of equity 9.60% 12.40%
Tax rate 19.00% 19.00%
Debt/Equity ratio 1.05 1.05
Cost of debt 5.90% 7.10%
After-tax WACC 7.1% 9.0%
Selected WACC 8.1%

MAB.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 MAB.L:

cost_of_equity (11.00%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.94) + 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.