SMIN.L
Smiths Group PLC
Price:  
2,372.00 
GBP
Volume:  
867,789.00
United Kingdom | Industrial Conglomerates
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SMIN.L WACC - Weighted Average Cost of Capital

The WACC of Smiths Group PLC (SMIN.L) is 9.0%.

The Cost of Equity of Smiths Group PLC (SMIN.L) is 9.50%.
The Cost of Debt of Smiths Group PLC (SMIN.L) is 5.40%.

Range Selected
Cost of equity 8.50% - 10.50% 9.50%
Tax rate 33.80% - 35.60% 34.70%
Cost of debt 5.10% - 5.70% 5.40%
WACC 8.1% - 10.0% 9.0%
WACC

SMIN.L WACC calculation

Category Low High
Long-term bond rate 4.0% 4.5%
Equity market risk premium 6.0% 7.0%
Adjusted beta 0.76 0.79
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.50% 10.50%
Tax rate 33.80% 35.60%
Debt/Equity ratio 0.08 0.08
Cost of debt 5.10% 5.70%
After-tax WACC 8.1% 10.0%
Selected WACC 9.0%

SMIN.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 SMIN.L:

cost_of_equity (9.50%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.76) + 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.