POLR.L WACC - Weighted Average Cost of Capital
The WACC of Polar Capital Holdings PLC (POLR.L) is 10.5%.
| Range | Selected | |
| Cost of equity | 9.2% - 12.1% | 10.65% |
| Tax rate | 21.2% - 21.2% | 21.2% |
| Cost of debt | 4.6% - 4.9% | 4.75% |
| WACC | 9.1% - 12.0% | 10.5% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.86 | 1.02 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.2% | 12.1% |
| Tax rate | 21.2% | 21.2% |
| Debt/Equity ratio | 0.01 | 0.01 |
| Cost of debt | 4.6% | 4.9% |
| After-tax WACC | 9.1% | 12.0% |
| Selected WACC | 10.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| POLR.L | Polar Capital Holdings PLC | 0.01 | 1.83 | 1.81 |
| BBN.SW | Bellevue Group AG | 0.17 | 0.72 | 0.63 |
| GIMB.BR | Gimv NV | 0.24 | 0.81 | 0.68 |
| LIO.L | Liontrust Asset Management PLC | 0.02 | 1.71 | 1.68 |
| LWDB.L | Law Debenture Corporation PLC | 0.14 | 1.26 | 1.13 |
| OCI.L | Oakley Capital Investments Ltd | 0.13 | 0.95 | 0.86 |
| PMI.L | Premier Miton Group PLC | 0.03 | 0.95 | 0.93 |
| SNN.L | Sanne Group PLC | 0.1 | 0.29 | 0.26 |
| VPBN.SW | VP Bank AG | 0.42 | 0.41 | 0.31 |
| XPS.L | XPS Pensions Group PLC | 0.04 | 1.17 | 1.13 |
| Low | High | |
| Unlevered beta | 0.79 | 1.01 |
| Relevered beta | 0.79 | 1.03 |
| Adjusted relevered beta | 0.86 | 1.02 |
POLR.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 POLR.L:
cost_of_equity (10.65%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.86) + 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.