SGE.L WACC - Weighted Average Cost of Capital
The WACC of Sage Group PLC (SGE.L) is 8.6%.
| Range | Selected | |
| Cost of equity | 7.7% - 10.5% | 9.1% |
| Tax rate | 20.7% - 23.4% | 22.05% |
| Cost of debt | 4.0% - 4.7% | 4.35% |
| WACC | 7.3% - 9.8% | 8.6% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.63 | 0.78 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.7% | 10.5% |
| Tax rate | 20.7% | 23.4% |
| Debt/Equity ratio | 0.1 | 0.1 |
| Cost of debt | 4.0% | 4.7% |
| After-tax WACC | 7.3% | 9.8% |
| Selected WACC | 8.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| SGE.L | Sage Group PLC | 0.1 | 1.13 | 1.05 |
| ALFA.L | Alfa Financial Software Holdings PLC | 0.01 | 0.31 | 0.31 |
| APTD.L | Aptitude Software Group PLC | 0.07 | -0.37 | -0.35 |
| FBEN.DE | Fyber NV | 0.33 | -0.13 | -0.11 |
| IDOX.L | Idox PLC | 0.09 | 0.39 | 0.36 |
| LINK.OL | Link Mobility Group Holding ASA | 0.46 | 1.06 | 0.78 |
| NEM.DE | Nemetschek SE | 0.04 | 1.21 | 1.17 |
| RIB.DE | RIB Software SE | 0.01 | 0.45 | 0.44 |
| TEMN.SW | Temenos AG | 0.13 | 0.95 | 0.86 |
| TMV.DE | TeamViewer AG | 0.25 | 0.62 | 0.52 |
| Low | High | |
| Unlevered beta | 0.41 | 0.62 |
| Relevered beta | 0.45 | 0.67 |
| Adjusted relevered beta | 0.63 | 0.78 |
SGE.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 SGE.L:
cost_of_equity (9.10%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.63) + 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.