SPX.L WACC - Weighted Average Cost of Capital
The WACC of Spirax-Sarco Engineering PLC (SPX.L) is 10.3%.
| Range | Selected | |
| Cost of equity | 10.2% - 13.7% | 11.95% |
| Tax rate | 25.8% - 26.4% | 26.1% |
| Cost of debt | 4.0% - 5.2% | 4.6% |
| WACC | 8.9% - 11.8% | 10.3% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 1.04 | 1.24 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 10.2% | 13.7% |
| Tax rate | 25.8% | 26.4% |
| Debt/Equity ratio | 0.23 | 0.23 |
| Cost of debt | 4.0% | 5.2% |
| After-tax WACC | 8.9% | 11.8% |
| Selected WACC | 10.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| SPX.L | Spirax-Sarco Engineering PLC | 0.23 | 1.54 | 1.32 |
| GIL.DE | DMG Mori AG | 0.02 | 0.01 | 0.01 |
| IMI.L | IMI PLC | 0.14 | 1.43 | 1.3 |
| IP.MI | Interpump Group SpA | 0.21 | 1.11 | 0.96 |
| RAA.DE | Rational AG | 0 | 0.84 | 0.84 |
| ROR.L | Rotork PLC | 0.01 | 1.14 | 1.13 |
| SFSN.SW | SFS Group AG | 0.13 | 0.81 | 0.74 |
| TROAX.ST | Troax Group AB (publ) | 0.1 | 0.76 | 0.71 |
| VACN.SW | VAT Group AG | 0.02 | 1.43 | 1.41 |
| WEIR.L | Weir Group PLC | 0.17 | 1.35 | 1.2 |
| Low | High | |
| Unlevered beta | 0.91 | 1.16 |
| Relevered beta | 1.06 | 1.36 |
| Adjusted relevered beta | 1.04 | 1.24 |
SPX.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 SPX.L:
cost_of_equity (11.95%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (1.04) + 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.