STAN.L
Standard Chartered PLC
Price:  
1,140.00 
GBP
Volume:  
6,526,085.00
United Kingdom | Banks
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STAN.L WACC - Weighted Average Cost of Capital

The WACC of Standard Chartered PLC (STAN.L) is 5.8%.

The Cost of Equity of Standard Chartered PLC (STAN.L) is 15.10%.
The Cost of Debt of Standard Chartered PLC (STAN.L) is 5.00%.

Range Selected
Cost of equity 13.30% - 16.90% 15.10%
Tax rate 32.20% - 32.50% 32.35%
Cost of debt 5.00% - 5.00% 5.00%
WACC 5.5% - 6.2% 5.8%
WACC

STAN.L WACC calculation

Category Low High
Long-term bond rate 4.0% 4.5%
Equity market risk premium 6.0% 7.0%
Adjusted beta 1.56 1.7
Additional risk adjustments 0.0% 0.5%
Cost of equity 13.30% 16.90%
Tax rate 32.20% 32.50%
Debt/Equity ratio 3.78 3.78
Cost of debt 5.00% 5.00%
After-tax WACC 5.5% 6.2%
Selected WACC 5.8%

STAN.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 STAN.L:

cost_of_equity (15.10%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (1.56) + 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.