SYS.L WACC - Weighted Average Cost of Capital

The WACC of SysGroup PLC (SYS.L) is 7.5%.

The Cost of Equity of SysGroup PLC (SYS.L) is 7.40%.

The Cost of Debt of SysGroup PLC (SYS.L) is 10.25%.

	Range	Selected
Cost of equity	6.50% - 8.30%	7.40%
Tax rate	22.60% - 25.10%	23.85%
Cost of debt	7.00% - 13.50%	10.25%
WACC	6.2% - 8.8%	7.5%

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	0.42	0.47

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.50%	8.30%

Tax rate	22.60%	25.10%
Debt/Equity ratio	0.36	0.36
Cost of debt	7.00%	13.50%

After-tax WACC	6.2%	8.8%


Selected WACC	7.5%

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 (7.40%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.42) + 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.