PEN.L WACC - Weighted Average Cost of Capital

The WACC of Pennant International Group PLC (PEN.L) is 9.0%.

The Cost of Equity of Pennant International Group PLC (PEN.L) is 8.45%.

The Cost of Debt of Pennant International Group PLC (PEN.L) is 15.95%.

	Range	Selected
Cost of equity	6.70% - 10.20%	8.45%
Tax rate	26.90% - 34.40%	30.65%
Cost of debt	7.90% - 24.00%	15.95%
WACC	6.5% - 11.5%	9.0%

WACC

PEN.L WACC calculation

Category	Low	High

Long-term bond rate	4.0%	4.5%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.45	0.74

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.70%	10.20%

Tax rate	26.90%	34.40%
Debt/Equity ratio	0.31	0.31
Cost of debt	7.90%	24.00%

After-tax WACC	6.5%	11.5%


Selected WACC	9.0%

PEN.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 PEN.L:

cost_of_equity (8.45%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.45) + 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.