VCT.L WACC - Weighted Average Cost of Capital
The WACC of Victrex PLC (VCT.L) is 9.8%.
| Range | Selected | |
| Cost of equity | 8.4% - 12.0% | 10.2% |
| Tax rate | 15.4% - 18.0% | 16.7% |
| Cost of debt | 4.0% - 4.6% | 4.3% |
| WACC | 8.1% - 11.4% | 9.8% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.74 | 1 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.4% | 12.0% |
| Tax rate | 15.4% | 18.0% |
| Debt/Equity ratio | 0.07 | 0.07 |
| Cost of debt | 4.0% | 4.6% |
| After-tax WACC | 8.1% | 11.4% |
| Selected WACC | 9.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| VCT.L | Victrex PLC | 0.07 | 1.62 | 1.53 |
| ACT.DE | AlzChem Group AG | 0.04 | 0.49 | 0.47 |
| BRG.OL | Borregaard ASA | 0.12 | 0.56 | 0.51 |
| DESN.SW | Dottikon Es Holding AG | 0.03 | 0.65 | 0.63 |
| ELM.L | Elementis PLC | 0.26 | 1.12 | 0.92 |
| GUR.SW | Gurit Holding AG | 0.15 | 1.1 | 0.98 |
| PCR.WA | PCC Rokita SA | 0.43 | 0.47 | 0.35 |
| RBT.PA | Robertet SA | 0.16 | 0.41 | 0.36 |
| SCPA.L | Scapa Group PLC | 0.23 | 1.55 | 1.31 |
| TET.L | Treatt PLC | 0.02 | 1.08 | 1.07 |
| Low | High | |
| Unlevered beta | 0.58 | 0.94 |
| Relevered beta | 0.61 | 1 |
| Adjusted relevered beta | 0.74 | 1 |
VCT.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 VCT.L:
cost_of_equity (10.20%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.74) + 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.