VOD.L
Vodafone Group PLC
Price:  
78.92 
GBP
Volume:  
70,547,450
United Kingdom | Wireless Telecommunication Services

VOD.L WACC - Weighted Average Cost of Capital

The WACC of Vodafone Group PLC (VOD.L) is 7.0%.

The Cost of Equity of Vodafone Group PLC (VOD.L) is 11.4%.
The Cost of Debt of Vodafone Group PLC (VOD.L) is 6.6%.

RangeSelected
Cost of equity9.3% - 13.5%11.4%
Tax rate19.0% - 19.0%19%
Cost of debt4.0% - 9.2%6.6%
WACC4.8% - 9.1%7.0%
WACC

VOD.L WACC calculation

CategoryLowHigh
Long-term bond rate4.0%4.5%
Equity market risk premium6.0%7.0%
Adjusted beta0.881.21
Additional risk adjustments0.0%0.5%
Cost of equity9.3%13.5%
Tax rate19.0%19.0%
Debt/Equity ratio
2.752.75
Cost of debt4.0%9.2%
After-tax WACC4.8%9.1%
Selected WACC7.0%

VOD.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 VOD.L:

cost_of_equity (11.40%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.88) + 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.