SLNG.L WACC - Weighted Average Cost of Capital

The WACC of H C Slingsby PLC (SLNG.L) is 7.1%.

The Cost of Equity of H C Slingsby PLC (SLNG.L) is 7.25%.

The Cost of Debt of H C Slingsby PLC (SLNG.L) is 5.50%.

	Range	Selected
Cost of equity	6.30% - 8.20%	7.25%
Tax rate	20.60% - 25.40%	23.00%
Cost of debt	4.00% - 7.00%	5.50%
WACC	6.1% - 8.1%	7.1%

WACC

SLNG.L WACC calculation

Category	Low	High

Long-term bond rate	4.0%	4.5%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.38	0.46

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.30%	8.20%

Tax rate	20.60%	25.40%
Debt/Equity ratio	0.05	0.05
Cost of debt	4.00%	7.00%

After-tax WACC	6.1%	8.1%


Selected WACC	7.1%

SLNG.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 SLNG.L:

cost_of_equity (7.25%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.38) + 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.