WG.L WACC - Weighted Average Cost of Capital

The WACC of John Wood Group PLC (WG.L) is 6.6%.

The Cost of Equity of John Wood Group PLC (WG.L) is 18.20%.

The Cost of Debt of John Wood Group PLC (WG.L) is 6.25%.

	Range	Selected
Cost of equity	13.30% - 23.10%	18.20%
Tax rate	15.10% - 29.00%	22.05%
Cost of debt	5.50% - 7.00%	6.25%
WACC	5.8% - 7.3%	6.6%

WACC

WG.L WACC calculation

Category	Low	High

Long-term bond rate	4.0%	4.5%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.56	2.59

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.30%	23.10%

Tax rate	15.10%	29.00%
Debt/Equity ratio	6.61	6.61
Cost of debt	5.50%	7.00%

After-tax WACC	5.8%	7.3%


Selected WACC	6.6%

WG.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 WG.L:

cost_of_equity (18.20%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (1.56) + 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.