TMG.L WACC - Weighted Average Cost of Capital

The WACC of Mission Group PLC (TMG.L) is 7.2%.

The Cost of Equity of Mission Group PLC (TMG.L) is 10.50%.

The Cost of Debt of Mission Group PLC (TMG.L) is 6.40%.

	Range	Selected
Cost of equity	8.60% - 12.40%	10.50%
Tax rate	16.30% - 26.30%	21.30%
Cost of debt	5.20% - 7.60%	6.40%
WACC	6.1% - 8.3%	7.2%

WACC

TMG.L WACC calculation

Category	Low	High

Long-term bond rate	4.0%	4.5%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.77	1.06

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.60%	12.40%

Tax rate	16.30%	26.30%
Debt/Equity ratio	1.54	1.54
Cost of debt	5.20%	7.60%

After-tax WACC	6.1%	8.3%


Selected WACC	7.2%

TMG.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 TMG.L:

cost_of_equity (10.50%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.77) + 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.