The WACC of Mhp Se (MHPC.L) is 9.9%.
| Range | Selected | |
| Cost of equity | 13.90% - 18.50% | 16.20% |
| Tax rate | 7.80% - 11.20% | 9.50% |
| Cost of debt | 8.30% - 9.20% | 8.75% |
| WACC | 9.1% - 10.6% | 9.9% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 5.5% | 6.5% |
| Adjusted beta | 1.81 | 2.08 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 13.90% | 18.50% |
| Tax rate | 7.80% | 11.20% |
| Debt/Equity ratio | 3.26 | 3.26 |
| Cost of debt | 8.30% | 9.20% |
| After-tax WACC | 9.1% | 10.6% |
| Selected WACC | 9.9% | |
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 MHPC.L:
cost_of_equity (16.20%) = risk_free_rate (4.25%) + equity_risk_premium (6.00%) * adjusted_beta (1.81) + 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.