XPP.L WACC - Weighted Average Cost of Capital

The WACC of XP Power Ltd (XPP.L) is 11.4%.

The Cost of Equity of XP Power Ltd (XPP.L) is 11.35%.

The Cost of Debt of XP Power Ltd (XPP.L) is 15.45%.

	Range	Selected
Cost of equity	9.40% - 13.30%	11.35%
Tax rate	20.90% - 27.30%	24.10%
Cost of debt	6.90% - 24.00%	15.45%
WACC	7.6% - 15.2%	11.4%

WACC

XPP.L WACC calculation

Category	Low	High

Long-term bond rate	4.0%	4.5%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.91	1.19

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.40%	13.30%

Tax rate	20.90%	27.30%
Debt/Equity ratio	0.82	0.82
Cost of debt	6.90%	24.00%

After-tax WACC	7.6%	15.2%


Selected WACC	11.4%

XPP.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 XPP.L:

cost_of_equity (11.35%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.91) + 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.