RS1.L WACC - Weighted Average Cost of Capital

The WACC of RS Group PLC (RS1.L) is 9.7%.

The Cost of Equity of RS Group PLC (RS1.L) is 10.80%.

The Cost of Debt of RS Group PLC (RS1.L) is 5.30%.

	Range	Selected
Cost of equity	9.30% - 12.30%	10.80%
Tax rate	23.70% - 24.70%	24.20%
Cost of debt	5.10% - 5.50%	5.30%
WACC	8.4% - 11.0%	9.7%

WACC

RS1.L WACC calculation

Category	Low	High

Long-term bond rate	4.0%	4.5%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.89	1.05

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.30%	12.30%

Tax rate	23.70%	24.70%
Debt/Equity ratio	0.19	0.19
Cost of debt	5.10%	5.50%

After-tax WACC	8.4%	11.0%


Selected WACC	9.7%

RS1.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 RS1.L:

cost_of_equity (10.80%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.89) + 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.