SUMO.L WACC - Weighted Average Cost of Capital
The WACC of Sumo Group PLC (SUMO.L) is 7.2%.
| Range | Selected | |
| Cost of equity | 6.4% - 8.2% | 7.3% |
| Tax rate | 26.6% - 36.5% | 31.55% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 6.3% - 8.1% | 7.2% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 5.3% | 6.3% |
| Adjusted beta | 0.64 | 0.68 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.4% | 8.2% |
| Tax rate | 26.6% | 36.5% |
| Debt/Equity ratio | 0.02 | 0.02 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 6.3% | 8.1% |
| Selected WACC | 7.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| SUMO.L | Sumo Group PLC | 0.02 | 1.29 | 1.28 |
| 11B.WA | 11 Bit Studios SA | 0.01 | 0.79 | 0.78 |
| EG7.ST | Enad Global 7 AB (publ) | 0.05 | 0.51 | 0.49 |
| FLEXM.ST | Flexion Mobile PLC | 0.02 | 0.21 | 0.21 |
| M8G.DE | MEDIA AND GAMES INVEST PLC | 1.26 | 0.39 | 0.21 |
| MAGI.ST | MAG Interactive AB (publ) | 0.06 | 0.51 | 0.49 |
| PCF.WA | PCF Group SA | 0.32 | 0.98 | 0.81 |
| REMEDY.HE | Remedy Entertainment Oyj | 0.15 | 1.27 | 1.15 |
| TEN.WA | Ten Square Games SA | 0.04 | 0.6 | 0.58 |
| TM17.L | Team17 Group PLC | 0.01 | 1.42 | 1.41 |
| Low | High | |
| Unlevered beta | 0.55 | 0.79 |
| Relevered beta | 0.46 | 0.52 |
| Adjusted relevered beta | 0.64 | 0.68 |
SUMO.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 SUMO.L:
cost_of_equity (7.30%) = risk_free_rate (3.15%) + equity_risk_premium (5.80%) * adjusted_beta (0.64) + 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.