RWS.L
RWS Holdings PLC
Price:  
66.00 
GBP
Volume:  
15,422,107.00
United Kingdom | Professional Services
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RWS.L WACC - Weighted Average Cost of Capital

The WACC of RWS Holdings PLC (RWS.L) is 7.5%.

The Cost of Equity of RWS Holdings PLC (RWS.L) is 9.35%.
The Cost of Debt of RWS Holdings PLC (RWS.L) is 4.30%.

Range Selected
Cost of equity 7.90% - 10.80% 9.35%
Tax rate 23.10% - 24.80% 23.95%
Cost of debt 4.00% - 4.60% 4.30%
WACC 6.4% - 8.6% 7.5%
WACC

RWS.L WACC calculation

Category Low High
Long-term bond rate 4.0% 4.5%
Equity market risk premium 6.0% 7.0%
Adjusted beta 0.65 0.83
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.90% 10.80%
Tax rate 23.10% 24.80%
Debt/Equity ratio 0.43 0.43
Cost of debt 4.00% 4.60%
After-tax WACC 6.4% 8.6%
Selected WACC 7.5%

RWS.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 RWS.L:

cost_of_equity (9.35%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.65) + 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.