SYS.L WACC - Weighted Average Cost of Capital

The WACC of SysGroup PLC (SYS.L) is 7.2%.

The Cost of Equity of SysGroup PLC (SYS.L) is 7.10%.

The Cost of Debt of SysGroup PLC (SYS.L) is 9.95%.

	Range	Selected
Cost of equity	6.00% - 8.20%	7.10%
Tax rate	22.60% - 28.10%	25.35%
Cost of debt	7.00% - 12.90%	9.95%
WACC	5.9% - 8.4%	7.2%

WACC

SYS.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	0.46

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.00%	8.20%

Tax rate	22.60%	28.10%
Debt/Equity ratio	0.29	0.29
Cost of debt	7.00%	12.90%

After-tax WACC	5.9%	8.4%


Selected WACC	7.2%

SYS.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 SYS.L:

cost_of_equity (7.10%) = 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.