PHE.L
Powerhouse Energy Group PLC
Price:  
0.70 
GBP
Volume:  
26,929,168.00
United Kingdom | Electrical Equipment
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PHE.L WACC - Weighted Average Cost of Capital

The WACC of Powerhouse Energy Group PLC (PHE.L) is 7.6%.

The Cost of Equity of Powerhouse Energy Group PLC (PHE.L) is 7.60%.
The Cost of Debt of Powerhouse Energy Group PLC (PHE.L) is 7.00%.

Range Selected
Cost of equity 6.20% - 9.00% 7.60%
Tax rate 1.70% - 3.80% 2.75%
Cost of debt 7.00% - 7.00% 7.00%
WACC 6.2% - 9.0% 7.6%
WACC

PHE.L WACC calculation

Category Low High
Long-term bond rate 4.0% 4.5%
Equity market risk premium 6.0% 7.0%
Adjusted beta 0.37 0.58
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.20% 9.00%
Tax rate 1.70% 3.80%
Debt/Equity ratio 0.01 0.01
Cost of debt 7.00% 7.00%
After-tax WACC 6.2% 9.0%
Selected WACC 7.6%

PHE.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 PHE.L:

cost_of_equity (7.60%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.37) + 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.