The WACC of Topps Tiles PLC (TPT.L) is 7.6%.
Range | Selected | |
Cost of equity | 8.9% - 12.7% | 10.8% |
Tax rate | 20.0% - 22.0% | 21% |
Cost of debt | 4.2% - 9.2% | 6.7% |
WACC | 5.7% - 9.5% | 7.6% |
Category | Low | High |
Long-term bond rate | 4.0% | 4.5% |
Equity market risk premium | 6.0% | 7.0% |
Adjusted beta | 0.82 | 1.11 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 8.9% | 12.7% |
Tax rate | 20.0% | 22.0% |
Debt/Equity ratio | 1.38 | 1.38 |
Cost of debt | 4.2% | 9.2% |
After-tax WACC | 5.7% | 9.5% |
Selected WACC | 7.6% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
TPT.L | Topps Tiles PLC | 1.38 | 0.4 | 0.19 |
ALBOU.PA | Bourrelier Group SA | 0.44 | 0.23 | 0.17 |
ALMRB.PA | MR Bricolage SA | 0.94 | 0.22 | 0.12 |
BBED.AS | Beter Bed Holding NV | 0.28 | 1.99 | 1.63 |
BMAX.ST | Byggmax Group AB | 0.85 | 0.72 | 0.43 |
CLAS B.ST | Clas Ohlson AB | 0.1 | 0.61 | 0.56 |
G4M.L | Gear4music Holdings PLC | 0.55 | 1.75 | 1.22 |
HBM.DE | Hornbach Baumarkt AG | 1.19 | 1.36 | 0.7 |
LYKO A.ST | Lyko Group AB (publ) | 0.6 | 0.81 | 0.55 |
SAMS.PA | Samse SA | 1.14 | 0.43 | 0.23 |
Low | High | |
Unlevered beta | 0.35 | 0.55 |
Relevered beta | 0.73 | 1.16 |
Adjusted relevered beta | 0.82 | 1.11 |
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 TPT.L:
cost_of_equity (10.80%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.82) + 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.