JSG.L WACC - Weighted Average Cost of Capital

The WACC of Johnson Service Group PLC (JSG.L) is 8.5%.

The Cost of Equity of Johnson Service Group PLC (JSG.L) is 9.80%.

The Cost of Debt of Johnson Service Group PLC (JSG.L) is 6.05%.

	Range	Selected
Cost of equity	7.70% - 11.90%	9.80%
Tax rate	26.20% - 27.40%	26.80%
Cost of debt	4.90% - 7.20%	6.05%
WACC	6.7% - 10.3%	8.5%

WACC

JSG.L WACC calculation

Category	Low	High

Long-term bond rate	4.0%	4.5%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.62	0.99

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.70%	11.90%

Tax rate	26.20%	27.40%
Debt/Equity ratio	0.33	0.33
Cost of debt	4.90%	7.20%

After-tax WACC	6.7%	10.3%


Selected WACC	8.5%

JSG.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 JSG.L:

cost_of_equity (9.80%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.62) + 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.