SYS.L WACC - Weighted Average Cost of Capital

The WACC of SysGroup PLC (SYS.L) is 7.7%.

The Cost of Equity of SysGroup PLC (SYS.L) is 7.85%.

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

	Range	Selected
Cost of equity	6.70% - 9.00%	7.85%
Tax rate	22.60% - 28.10%	25.35%
Cost of debt	7.00% - 12.90%	9.95%
WACC	6.4% - 9.1%	7.7%

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	0.46	0.57

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.70%	9.00%

Tax rate	22.60%	28.10%
Debt/Equity ratio	0.31	0.31
Cost of debt	7.00%	12.90%

After-tax WACC	6.4%	9.1%


Selected WACC	7.7%

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 (7.85%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.46) + 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.