TPG.L WACC - Weighted Average Cost of Capital

The WACC of TP Group PLC (TPG.L) is 6.8%.

The Cost of Equity of TP Group PLC (TPG.L) is 6.95%.

The Cost of Debt of TP Group PLC (TPG.L) is 8.20%.

	Range	Selected
Cost of equity	6.20% - 7.70%	6.95%
Tax rate	7.40% - 29.70%	18.55%
Cost of debt	7.00% - 9.40%	8.20%
WACC	6.3% - 7.3%	6.8%

WACC

TPG.L WACC calculation

Category	Low	High

Long-term bond rate	4.0%	4.5%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.36	0.39

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.20%	7.70%

Tax rate	7.40%	29.70%
Debt/Equity ratio	0.59	0.59
Cost of debt	7.00%	9.40%

After-tax WACC	6.3%	7.3%


Selected WACC	6.8%

TPG.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 TPG.L:

cost_of_equity (6.95%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.36) + 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.