The WACC of Property Franchise Group PLC (TPFG.L) is 8.6%.
Range | Selected | |
Cost of equity | 6.3% - 8.0% | 7.15% |
Tax rate | 20.0% - 24.4% | 22.2% |
Cost of debt | 4.6% - 98.8% | 51.7% |
WACC | 6.2% - 11.1% | 8.6% |
Category | Low | High |
Long-term bond rate | 4.0% | 4.5% |
Equity market risk premium | 6.0% | 7.0% |
Adjusted beta | 0.39 | 0.43 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 6.3% | 8.0% |
Tax rate | 20.0% | 24.4% |
Debt/Equity ratio | 0.05 | 0.05 |
Cost of debt | 4.6% | 98.8% |
After-tax WACC | 6.2% | 11.1% |
Selected WACC | 8.6% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
TPFG.L | Property Franchise Group PLC | 0.05 | 0.38 | 0.37 |
ACCB.BR | Accentis NV | 0.35 | 0.21 | 0.16 |
CRC.L | Circle Property PLC | 20.91 | -1.98 | -0.11 |
EGNETY.CO | EgnsINVEST Ejendomme Tyskland A/S | 1.95 | 0.18 | 0.07 |
IC8.DE | InCity Immobilien AG | 1.35 | 0.65 | 0.31 |
KAPIAB.ST | Kalleback Property Invest AB | 0.65 | -0.11 | -0.07 |
RLE.L | Real Estate Investors PLC | 0.71 | 0.27 | 0.17 |
SOLNA.ST | Solnaberg Property AB (publ) | 1.18 | 0.17 | 0.09 |
SPEL.PA | Fonciere Volta SA | 0.86 | 0.23 | 0.14 |
ZUBN.SW | Zueblin Immobilien Holding AG | 0.4 | 0.1 | 0.07 |
Low | High | |
Unlevered beta | 0.08 | 0.15 |
Relevered beta | 0.09 | 0.15 |
Adjusted relevered beta | 0.39 | 0.43 |
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.