PRV.L
Porvair PLC
Price:  
814.00 
GBP
Volume:  
24,896.00
United Kingdom | Machinery
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PRV.L WACC - Weighted Average Cost of Capital

The WACC of Porvair PLC (PRV.L) is 8.1%.

The Cost of Equity of Porvair PLC (PRV.L) is 8.35%.
The Cost of Debt of Porvair PLC (PRV.L) is 4.30%.

Range Selected
Cost of equity 7.40% - 9.30% 8.35%
Tax rate 20.60% - 21.00% 20.80%
Cost of debt 4.00% - 4.60% 4.30%
WACC 7.2% - 9.0% 8.1%
WACC

PRV.L WACC calculation

Category Low High
Long-term bond rate 4.0% 4.5%
Equity market risk premium 6.0% 7.0%
Adjusted beta 0.57 0.62
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.40% 9.30%
Tax rate 20.60% 21.00%
Debt/Equity ratio 0.05 0.05
Cost of debt 4.00% 4.60%
After-tax WACC 7.2% 9.0%
Selected WACC 8.1%

PRV.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 PRV.L:

cost_of_equity (8.35%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.57) + 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.