The WACC of Hostmore PLC (MORE.L) is 7.2%.
| Range | Selected | |
| Cost of equity | 1,210.80% - 1,668.80% | 1,439.80% |
| Tax rate | 11.50% - 17.10% | 14.30% |
| Cost of debt | 4.00% - 9.20% | 6.60% |
| WACC | 4.9% - 9.5% | 7.2% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 201.8 | 238.37 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 1,210.80% | 1,668.80% |
| Tax rate | 11.50% | 17.10% |
| Debt/Equity ratio | 902.1 | 902.1 |
| Cost of debt | 4.00% | 9.20% |
| After-tax WACC | 4.9% | 9.5% |
| Selected WACC | 7.2% | |
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 MORE.L:
cost_of_equity (1,439.80%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (201.8) + 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.