SDY.L WACC - Weighted Average Cost of Capital

The WACC of Speedy Hire PLC (SDY.L) is 7.7%.

The Cost of Equity of Speedy Hire PLC (SDY.L) is 7.30%.

The Cost of Debt of Speedy Hire PLC (SDY.L) is 11.15%.

	Range	Selected
Cost of equity	6.40% - 8.20%	7.30%
Tax rate	26.60% - 29.30%	27.95%
Cost of debt	6.50% - 15.80%	11.15%
WACC	5.4% - 10.1%	7.7%

WACC

SDY.L WACC calculation

Category	Low	High

Long-term bond rate	4.0%	4.5%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.41	0.46

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.40%	8.20%

Tax rate	26.60%	29.30%
Debt/Equity ratio	1.72	1.72
Cost of debt	6.50%	15.80%

After-tax WACC	5.4%	10.1%


Selected WACC	7.7%

SDY.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 SDY.L:

cost_of_equity (7.30%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.41) + 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.