The WACC of Revolution Bars Group PLC (RBG.L) is 15.0%.
| Range | Selected | |
| Cost of equity | 5.80% - 8.40% | 7.10% |
| Tax rate | 0.10% - 2.90% | 1.50% |
| Cost of debt | 10.50% - 21.00% | 15.75% |
| WACC | 10.2% - 19.7% | 15.0% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.3 | 0.49 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.80% | 8.40% |
| Tax rate | 0.10% | 2.90% |
| Debt/Equity ratio | 17.46 | 17.46 |
| Cost of debt | 10.50% | 21.00% |
| After-tax WACC | 10.2% | 19.7% |
| Selected WACC | 15.0% | |
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 RBG.L:
cost_of_equity (7.10%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.3) + 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.