WTB.L
Whitbread PLC
Price:  
2,733.00 
GBP
Volume:  
630,116.00
United Kingdom | Hotels, Restaurants & Leisure
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WTB.L WACC - Weighted Average Cost of Capital

The WACC of Whitbread PLC (WTB.L) is 6.5%.

The Cost of Equity of Whitbread PLC (WTB.L) is 9.00%.
The Cost of Debt of Whitbread PLC (WTB.L) is 5.55%.

Range Selected
Cost of equity 8.00% - 10.00% 9.00%
Tax rate 24.30% - 26.20% 25.25%
Cost of debt 4.00% - 7.10% 5.55%
WACC 5.5% - 7.6% 6.5%
WACC

WTB.L WACC calculation

Category Low High
Long-term bond rate 4.0% 4.5%
Equity market risk premium 6.0% 7.0%
Adjusted beta 0.67 0.72
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.00% 10.00%
Tax rate 24.30% 26.20%
Debt/Equity ratio 1.06 1.06
Cost of debt 4.00% 7.10%
After-tax WACC 5.5% 7.6%
Selected WACC 6.5%

WTB.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 WTB.L:

cost_of_equity (9.00%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.67) + 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.