PAY.L
PayPoint plc
Price:  
675.00 
GBP
Volume:  
70,225.00
United Kingdom | Commercial Services & Supplies
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PAY.L WACC - Weighted Average Cost of Capital

The WACC of PayPoint plc (PAY.L) is 8.2%.

The Cost of Equity of PayPoint plc (PAY.L) is 9.10%.
The Cost of Debt of PayPoint plc (PAY.L) is 4.65%.

Range Selected
Cost of equity 7.60% - 10.60% 9.10%
Tax rate 19.40% - 20.80% 20.10%
Cost of debt 4.40% - 4.90% 4.65%
WACC 6.9% - 9.4% 8.2%
WACC

PAY.L WACC calculation

Category Low High
Long-term bond rate 4.0% 4.5%
Equity market risk premium 6.0% 7.0%
Adjusted beta 0.6 0.8
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.60% 10.60%
Tax rate 19.40% 20.80%
Debt/Equity ratio 0.21 0.21
Cost of debt 4.40% 4.90%
After-tax WACC 6.9% 9.4%
Selected WACC 8.2%

PAY.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 PAY.L:

cost_of_equity (9.10%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.6) + 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.