MPE.L WACC - Weighted Average Cost of Capital

The WACC of M P Evans Group PLC (MPE.L) is 7.7%.

The Cost of Equity of M P Evans Group PLC (MPE.L) is 7.90%.

The Cost of Debt of M P Evans Group PLC (MPE.L) is 4.85%.

	Range	Selected
Cost of equity	6.90% - 8.90%	7.90%
Tax rate	23.30% - 24.70%	24.00%
Cost of debt	4.60% - 5.10%	4.85%
WACC	6.8% - 8.7%	7.7%

WACC

MPE.L WACC calculation

Category	Low	High

Long-term bond rate	4.0%	4.5%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.49	0.55

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.90%	8.90%

Tax rate	23.30%	24.70%
Debt/Equity ratio	0.04	0.04
Cost of debt	4.60%	5.10%

After-tax WACC	6.8%	8.7%


Selected WACC	7.7%

MPE.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 MPE.L:

cost_of_equity (7.90%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.49) + 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.