QQ.L
Qinetiq Group PLC
Price:  
415.80 
GBP
Volume:  
1,671,675.00
United Kingdom | Aerospace & Defense
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QQ.L WACC - Weighted Average Cost of Capital

The WACC of Qinetiq Group PLC (QQ.L) is 9.5%.

The Cost of Equity of Qinetiq Group PLC (QQ.L) is 9.75%.
The Cost of Debt of Qinetiq Group PLC (QQ.L) is 10.00%.

Range Selected
Cost of equity 8.40% - 11.10% 9.75%
Tax rate 17.60% - 21.20% 19.40%
Cost of debt 4.60% - 15.40% 10.00%
WACC 7.7% - 11.3% 9.5%
WACC

QQ.L WACC calculation

Category Low High
Long-term bond rate 4.0% 4.5%
Equity market risk premium 6.0% 7.0%
Adjusted beta 0.74 0.88
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.40% 11.10%
Tax rate 17.60% 21.20%
Debt/Equity ratio 0.18 0.18
Cost of debt 4.60% 15.40%
After-tax WACC 7.7% 11.3%
Selected WACC 9.5%

QQ.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 QQ.L:

cost_of_equity (9.75%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * 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.