SSPG.L WACC - Weighted Average Cost of Capital

The WACC of SSP Group PLC (SSPG.L) is 6.8%.

The Cost of Equity of SSP Group PLC (SSPG.L) is 10.25%.

The Cost of Debt of SSP Group PLC (SSPG.L) is 6.50%.

	Range	Selected
Cost of equity	8.90% - 11.60%	10.25%
Tax rate	33.00% - 46.10%	39.55%
Cost of debt	5.40% - 7.60%	6.50%
WACC	6.0% - 7.5%	6.8%

WACC

SSPG.L WACC calculation

Category	Low	High

Long-term bond rate	4.0%	4.5%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.81	0.95

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.90%	11.60%

Tax rate	33.00%	46.10%
Debt/Equity ratio	1.2	1.2
Cost of debt	5.40%	7.60%

After-tax WACC	6.0%	7.5%


Selected WACC	6.8%

SSPG.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 SSPG.L:

cost_of_equity (10.25%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.81) + 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.