SXS.L
Spectris PLC
Price:  
2,026.00 
GBP
Volume:  
257,532.00
United Kingdom | Electronic Equipment, Instruments & Components
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SXS.L WACC - Weighted Average Cost of Capital

The WACC of Spectris PLC (SXS.L) is 10.5%.

The Cost of Equity of Spectris PLC (SXS.L) is 12.45%.
The Cost of Debt of Spectris PLC (SXS.L) is 7.00%.

Range Selected
Cost of equity 11.00% - 13.90% 12.45%
Tax rate 22.40% - 23.50% 22.95%
Cost of debt 5.10% - 8.90% 7.00%
WACC 9.1% - 12.0% 10.5%
WACC

SXS.L WACC calculation

Category Low High
Long-term bond rate 4.0% 4.5%
Equity market risk premium 6.0% 7.0%
Adjusted beta 1.18 1.28
Additional risk adjustments 0.0% 0.5%
Cost of equity 11.00% 13.90%
Tax rate 22.40% 23.50%
Debt/Equity ratio 0.37 0.37
Cost of debt 5.10% 8.90%
After-tax WACC 9.1% 12.0%
Selected WACC 10.5%

SXS.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 SXS.L:

cost_of_equity (12.45%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (1.18) + 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.