SPR.L WACC - Weighted Average Cost of Capital

The WACC of Springfield Properties PLC (SPR.L) is 8.3%.

The Cost of Equity of Springfield Properties PLC (SPR.L) is 10.25%.

The Cost of Debt of Springfield Properties PLC (SPR.L) is 5.85%.

	Range	Selected
Cost of equity	8.00% - 12.50%	10.25%
Tax rate	21.40% - 21.80%	21.60%
Cost of debt	5.50% - 6.20%	5.85%
WACC	6.7% - 9.8%	8.3%

WACC

SPR.L WACC calculation

Category	Low	High

Long-term bond rate	4.0%	4.5%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.67	1.07

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.00%	12.50%

Tax rate	21.40%	21.80%
Debt/Equity ratio	0.53	0.53
Cost of debt	5.50%	6.20%

After-tax WACC	6.7%	9.8%


Selected WACC	8.3%

SPR.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 SPR.L:

cost_of_equity (10.25%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.67) + 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.