SSTY.L
Safestay PLC
Price:  
24.50 
GBP
Volume:  
25,761.00
United Kingdom | Hotels, Restaurants & Leisure
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SSTY.L WACC - Weighted Average Cost of Capital

The WACC of Safestay PLC (SSTY.L) is 4.9%.

The Cost of Equity of Safestay PLC (SSTY.L) is 7.95%.
The Cost of Debt of Safestay PLC (SSTY.L) is 4.85%.

Range Selected
Cost of equity 6.00% - 9.90% 7.95%
Tax rate 19.00% - 19.00% 19.00%
Cost of debt 4.00% - 5.70% 4.85%
WACC 3.9% - 5.9% 4.9%
WACC

SSTY.L WACC calculation

Category Low High
Long-term bond rate 4.0% 4.5%
Equity market risk premium 6.0% 7.0%
Adjusted beta 0.33 0.7
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.00% 9.90%
Tax rate 19.00% 19.00%
Debt/Equity ratio 3.04 3.04
Cost of debt 4.00% 5.70%
After-tax WACC 3.9% 5.9%
Selected WACC 4.9%

SSTY.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 SSTY.L:

cost_of_equity (7.95%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.33) + 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.