PPIX.L WACC - Weighted Average Cost of Capital
The WACC of ProPhotonix Ltd (PPIX.L) is 7.8%.
| Range | Selected | |
| Cost of equity | 6.9% - 9.3% | 8.1% |
| Tax rate | 3.2% - 15.2% | 9.2% |
| Cost of debt | 4.0% - 4.7% | 4.35% |
| WACC | 6.7% - 8.9% | 7.8% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 5.3% | 6.3% |
| Adjusted beta | 0.74 | 0.84 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.9% | 9.3% |
| Tax rate | 3.2% | 15.2% |
| Debt/Equity ratio | 0.08 | 0.08 |
| Cost of debt | 4.0% | 4.7% |
| After-tax WACC | 6.7% | 8.9% |
| Selected WACC | 7.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| PPIX.L | ProPhotonix Ltd | 0.08 | 1.56 | 1.45 |
| ATI.PA | Actia Group SA | 2.75 | 1.78 | 0.5 |
| CICN.SW | Cicor Technologies Ltd | 0.2 | 0.7 | 0.59 |
| DAM.DE | Data Modul AG Produktion und Vertrieb von Elektronischen Systemen | 0.2 | 0.01 | 0.01 |
| GHH.L | Gooch & Housego PLC | 0.27 | 0.84 | 0.67 |
| HMX1R.RG | HansaMatrix AS | 0.74 | 0.17 | 0.1 |
| KIT.OL | Kitron ASA | 0.01 | 0.46 | 0.45 |
| LACR.PA | Lacroix Group SA | 4.19 | 0.8 | 0.16 |
| NEWAY.AS | Neways Electronics International NV | 0.46 | 0.95 | 0.66 |
| PIP.L | Pipehawk PLC | 11.92 | 0.16 | 0.01 |
| Low | High | |
| Unlevered beta | 0.34 | 0.53 |
| Relevered beta | 0.61 | 0.76 |
| Adjusted relevered beta | 0.74 | 0.84 |
PPIX.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 PPIX.L:
cost_of_equity (8.10%) = risk_free_rate (3.15%) + equity_risk_premium (5.80%) * adjusted_beta (0.74) + 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.