RSW.L
Renishaw PLC
Price:  
2,905.00 
GBP
Volume:  
61,340.00
United Kingdom | Electronic Equipment, Instruments & Components
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RSW.L WACC - Weighted Average Cost of Capital

The WACC of Renishaw PLC (RSW.L) is 11.7%.

The Cost of Equity of Renishaw PLC (RSW.L) is 11.75%.
The Cost of Debt of Renishaw PLC (RSW.L) is 4.30%.

Range Selected
Cost of equity 10.50% - 13.00% 11.75%
Tax rate 20.00% - 20.40% 20.20%
Cost of debt 4.00% - 4.60% 4.30%
WACC 10.5% - 12.9% 11.7%
WACC

RSW.L WACC calculation

Category Low High
Long-term bond rate 4.0% 4.5%
Equity market risk premium 6.0% 7.0%
Adjusted beta 1.09 1.15
Additional risk adjustments 0.0% 0.5%
Cost of equity 10.50% 13.00%
Tax rate 20.00% 20.40%
Debt/Equity ratio 0.01 0.01
Cost of debt 4.00% 4.60%
After-tax WACC 10.5% 12.9%
Selected WACC 11.7%

RSW.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 RSW.L:

cost_of_equity (11.75%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (1.09) + 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.