Balfour Beatty PLC (BBY.L) WACC Analysis

As of June 1, 2025, Balfour Beatty PLC (BBY.L) carries a Weighted Average Cost of Capital (WACC) of 8.4%. WACC reflects the blended rate Balfour Beatty PLC must pay to both equity and debt holders.

Within that, the cost of equity is 9.0%, the cost of debt is 5.1%, and the effective tax rate is 19.0%.

Breakdown of WACC Components

• Long-term bond rate: 4.0% – 4.5%
• Equity market risk premium: 6.0% – 7.0%
• Adjusted beta: 0.83 – 0.92
• Additional risk adjustment: 0.0% – 0.5%
• Debt-to-equity ratio: 0.44

What It Means for Investors

With a selected WACC of 8.4%, Balfour Beatty PLC must ensure any new investment returns exceed this threshold to generate shareholder value. This level reflects a moderate financing cost structure.