REAT.L WACC - Weighted Average Cost of Capital

The WACC of React Group PLC (REAT.L) is 9.3%.

The Cost of Equity of React Group PLC (REAT.L) is 7.90%.

The Cost of Debt of React Group PLC (REAT.L) is 52.55%.

	Range	Selected
Cost of equity	6.60% - 9.20%	7.90%
Tax rate	15.80% - 49.60%	32.70%
Cost of debt	9.20% - 95.90%	52.55%
WACC	6.7% - 11.9%	9.3%

WACC

REAT.L WACC calculation

Category	Low	High

Long-term bond rate	4.0%	4.5%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.44	0.6

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.60%	9.20%

Tax rate	15.80%	49.60%
Debt/Equity ratio	0.07	0.07
Cost of debt	9.20%	95.90%

After-tax WACC	6.7%	11.9%


Selected WACC	9.3%

REAT.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 REAT.L:

cost_of_equity (7.90%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.44) + 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.