PIP.L WACC - Weighted Average Cost of Capital

The WACC of Pipehawk PLC (PIP.L) is 8.7%.

The Cost of Equity of Pipehawk PLC (PIP.L) is 9.35%.

The Cost of Debt of Pipehawk PLC (PIP.L) is 12.50%.

	Range	Selected
Cost of equity	2.80% - 15.90%	9.35%
Tax rate	21.20% - 32.60%	26.90%
Cost of debt	4.00% - 21.00%	12.50%
WACC	3.1% - 14.3%	8.7%

WACC

PIP.L WACC calculation

Category	Low	High

Long-term bond rate	4.0%	4.5%
Equity market risk premium	6.0%	7.0%
Adjusted beta	-1.03	0.85

Additional risk adjustments	5.0%	5.5%
Cost of equity	2.80%	15.90%

Tax rate	21.20%	32.60%
Debt/Equity ratio	10.81	10.81
Cost of debt	4.00%	21.00%

After-tax WACC	3.1%	14.3%


Selected WACC	8.7%

PIP.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 PIP.L:

cost_of_equity (9.35%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (-1.03) + risk_adjustments (5.25%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.