STAN.L
Standard Chartered PLC
Price:  
1,096.50 
GBP
Volume:  
17,547,008.00
United Kingdom | Banks
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STAN.L WACC - Weighted Average Cost of Capital

The WACC of Standard Chartered PLC (STAN.L) is 5.6%.

The Cost of Equity of Standard Chartered PLC (STAN.L) is 14.85%.
The Cost of Debt of Standard Chartered PLC (STAN.L) is 5.00%.

Range Selected
Cost of equity 13.10% - 16.60% 14.85%
Tax rate 32.20% - 32.50% 32.35%
Cost of debt 5.00% - 5.00% 5.00%
WACC 5.3% - 6.0% 5.6%
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 1.52 1.66
Additional risk adjustments 0.0% 0.5%
Cost of equity 13.10% 16.60%
Tax rate 32.20% 32.50%
Debt/Equity ratio 4.06 4.06
Cost of debt 5.00% 5.00%
After-tax WACC 5.3% 6.0%
Selected WACC 5.6%

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 (14.85%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (1.52) + 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.