RKT.L
Reckitt Benckiser Group PLC
Price:  
5,572.00 
GBP
Volume:  
1,265,806.00
United Kingdom | Household Products
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RKT.L WACC - Weighted Average Cost of Capital

The WACC of Reckitt Benckiser Group PLC (RKT.L) is 9.0%.

The Cost of Equity of Reckitt Benckiser Group PLC (RKT.L) is 10.40%.
The Cost of Debt of Reckitt Benckiser Group PLC (RKT.L) is 4.45%.

Range Selected
Cost of equity 9.00% - 11.80% 10.40%
Tax rate 31.70% - 34.50% 33.10%
Cost of debt 4.00% - 4.90% 4.45%
WACC 7.8% - 10.2% 9.0%
WACC

RKT.L WACC calculation

Category Low High
Long-term bond rate 4.0% 4.5%
Equity market risk premium 6.0% 7.0%
Adjusted beta 0.83 0.97
Additional risk adjustments 0.0% 0.5%
Cost of equity 9.00% 11.80%
Tax rate 31.70% 34.50%
Debt/Equity ratio 0.23 0.23
Cost of debt 4.00% 4.90%
After-tax WACC 7.8% 10.2%
Selected WACC 9.0%

RKT.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 RKT.L:

cost_of_equity (10.40%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.83) + 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.