TPFG.L
Property Franchise Group PLC
Price:  
552 
GBP
Volume:  
42,638
United Kingdom | Real Estate Management & Development

TPFG.L WACC - Weighted Average Cost of Capital

The WACC of Property Franchise Group PLC (TPFG.L) is 8.6%.

The Cost of Equity of Property Franchise Group PLC (TPFG.L) is 7.15%.
The Cost of Debt of Property Franchise Group PLC (TPFG.L) is 51.7%.

RangeSelected
Cost of equity6.3% - 8.0%7.15%
Tax rate20.0% - 24.4%22.2%
Cost of debt4.6% - 98.8%51.7%
WACC6.2% - 11.1%8.6%
WACC

TPFG.L WACC calculation

CategoryLowHigh
Long-term bond rate4.0%4.5%
Equity market risk premium6.0%7.0%
Adjusted beta0.390.43
Additional risk adjustments0.0%0.5%
Cost of equity6.3%8.0%
Tax rate20.0%24.4%
Debt/Equity ratio
0.050.05
Cost of debt4.6%98.8%
After-tax WACC6.2%11.1%
Selected WACC8.6%

TPFG.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 TPFG.L:

cost_of_equity (7.15%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.39) + 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.