WEIR.L WACC - Weighted Average Cost of Capital

The WACC of Weir Group PLC (WEIR.L) is 10.7%.

The Cost of Equity of Weir Group PLC (WEIR.L) is 11.75%.

The Cost of Debt of Weir Group PLC (WEIR.L) is 4.45%.

	Range	Selected
Cost of equity	10.60% - 12.90%	11.75%
Tax rate	22.30% - 25.40%	23.85%
Cost of debt	4.00% - 4.90%	4.45%
WACC	9.7% - 11.8%	10.7%

WACC

WEIR.L WACC calculation

Category	Low	High

Long-term bond rate	4.0%	4.5%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.11	1.14

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.60%	12.90%

Tax rate	22.30%	25.40%
Debt/Equity ratio	0.15	0.15
Cost of debt	4.00%	4.90%

After-tax WACC	9.7%	11.8%


Selected WACC	10.7%

WEIR.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 WEIR.L:

cost_of_equity (11.75%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (1.11) + 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.