STVG.L WACC - Weighted Average Cost of Capital

The WACC of STV Group PLC (STVG.L) is 6.7%.

The Cost of Equity of STV Group PLC (STVG.L) is 7.10%.

The Cost of Debt of STV Group PLC (STVG.L) is 8.50%.

	Range	Selected
Cost of equity	6.20% - 8.00%	7.10%
Tax rate	22.80% - 25.20%	24.00%
Cost of debt	4.50% - 12.50%	8.50%
WACC	4.5% - 8.8%	6.7%

WACC

STVG.L WACC calculation

Category	Low	High

Long-term bond rate	4.0%	4.5%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.36	0.43

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.20%	8.00%

Tax rate	22.80%	25.20%
Debt/Equity ratio	1.57	1.57
Cost of debt	4.50%	12.50%

After-tax WACC	4.5%	8.8%


Selected WACC	6.7%

STVG.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 STVG.L:

cost_of_equity (7.10%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.36) + 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.