The WACC of Mobico Group PLC (MCG.L) is 5.6%.
| Range | Selected | |
| Cost of equity | 11.20% - 20.10% | 15.65% |
| Tax rate | 21.50% - 39.00% | 30.25% |
| Cost of debt | 5.10% - 9.20% | 7.15% |
| WACC | 4.5% - 6.7% | 5.6% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 1.21 | 2.17 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 11.20% | 20.10% |
| Tax rate | 21.50% | 39.00% |
| Debt/Equity ratio | 12.4 | 12.4 |
| Cost of debt | 5.10% | 9.20% |
| After-tax WACC | 4.5% | 6.7% |
| Selected WACC | 5.6% | |
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 MCG.L:
cost_of_equity (15.65%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (1.21) + 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.