TST.L WACC - Weighted Average Cost of Capital
The WACC of Touchstar PLC (TST.L) is 8.7%.
| Range | Selected | |
| Cost of equity | 7.3% - 10.3% | 8.8% |
| Tax rate | 21.6% - 44.1% | 32.85% |
| Cost of debt | 4.0% - 4.6% | 4.3% |
| WACC | 7.2% - 10.1% | 8.7% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.56 | 0.75 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.3% | 10.3% |
| Tax rate | 21.6% | 44.1% |
| Debt/Equity ratio | 0.02 | 0.02 |
| Cost of debt | 4.0% | 4.6% |
| After-tax WACC | 7.2% | 10.1% |
| Selected WACC | 8.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| TST.L | Touchstar PLC | 0.02 | 0.45 | 0.44 |
| ALMUN.PA | Munic SA | 1.09 | 0.3 | 0.17 |
| ALNN6.PA | Enensys Technologies SA | 1.01 | 0.3 | 0.18 |
| CEK.DE | CeoTronics Audio Video Data Communication AG | 0.15 | 1.41 | 1.28 |
| ENET.L | Ethernity Networks Ltd | 0.79 | 0.06 | 0.04 |
| FTC.L | Filtronic PLC | 0.01 | 1.52 | 1.51 |
| OPTI.BR | Crescent NV | 0.28 | 0.57 | 0.48 |
| SAF1R.RG | SAF Tehnika AS | 0.1 | -0.01 | -0.01 |
| SRT.L | SRT Marine Systems PLC | 0.08 | 0.89 | 0.85 |
| WAYS.ST | Waystream Holding AB (publ) | 0.04 | 0.88 | 0.85 |
| Low | High | |
| Unlevered beta | 0.34 | 0.62 |
| Relevered beta | 0.34 | 0.63 |
| Adjusted relevered beta | 0.56 | 0.75 |
TST.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 TST.L:
cost_of_equity (8.80%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.56) + 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.