OTB.L WACC - Weighted Average Cost of Capital
The WACC of On The Beach Group PLC (OTB.L) is 9.7%.
| Range | Selected | |
| Cost of equity | 8.1% - 11.3% | 9.7% |
| Tax rate | 17.6% - 20.1% | 18.85% |
| Cost of debt | 4.9% - 32.2% | 18.55% |
| WACC | 8.1% - 11.4% | 9.7% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.69 | 0.9 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.1% | 11.3% |
| Tax rate | 17.6% | 20.1% |
| Debt/Equity ratio | 0.01 | 0.01 |
| Cost of debt | 4.9% | 32.2% |
| After-tax WACC | 8.1% | 11.4% |
| Selected WACC | 9.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| OTB.L | On The Beach Group PLC | 0.01 | 1.15 | 1.14 |
| CDON.ST | Cdon AB | 0.01 | 0.41 | 0.41 |
| EDR.MC | eDreams Odigeo SA | 0.37 | 1.13 | 0.86 |
| HAPPY.CO | Happy Helper A/S | 1.68 | -0.48 | -0.2 |
| HOC.DE | Holidaycheck Group AG | 0.14 | 1.17 | 1.05 |
| MYSL.L | MySale Group PLC | 0.11 | 1.53 | 1.4 |
| TENG.L | Ten Lifestyle Group PLC | 0.19 | 0.45 | 0.39 |
| TRN.L | Trainline PLC | 0.14 | 0.93 | 0.83 |
| CANG | Cango Inc | 0.36 | 0.43 | 0.33 |
| DESP | Despegar.com Corp | 0.03 | 0.63 | 0.61 |
| Low | High | |
| Unlevered beta | 0.53 | 0.85 |
| Relevered beta | 0.54 | 0.85 |
| Adjusted relevered beta | 0.69 | 0.9 |
OTB.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 OTB.L:
cost_of_equity (9.70%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.69) + 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.