MIDW.L WACC - Weighted Average Cost of Capital

The WACC of Midwich Group PLC (MIDW.L) is 8.1%.

The Cost of Equity of Midwich Group PLC (MIDW.L) is 8.55%.

The Cost of Debt of Midwich Group PLC (MIDW.L) is 10.90%.

	Range	Selected
Cost of equity	7.20% - 9.90%	8.55%
Tax rate	26.80% - 30.20%	28.50%
Cost of debt	6.00% - 15.80%	10.90%
WACC	5.8% - 10.5%	8.1%

WACC

MIDW.L WACC calculation

Category	Low	High

Long-term bond rate	4.0%	4.5%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.54	0.7

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.20%	9.90%

Tax rate	26.80%	30.20%
Debt/Equity ratio	1.07	1.07
Cost of debt	6.00%	15.80%

After-tax WACC	5.8%	10.5%


Selected WACC	8.1%

MIDW.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 MIDW.L:

cost_of_equity (8.55%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.54) + 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.