Smart Metering Systems PLC (SMS.L) WACC Analysis

As of May 22, 2025, Smart Metering Systems PLC (SMS.L) carries a Weighted Average Cost of Capital (WACC) of 7.3%. WACC reflects the blended rate Smart Metering Systems PLC must pay to both equity and debt holders.

Within that, the cost of equity is 6.0%, the cost of debt is 5.1%, and the effective tax rate is 12.7%.

Breakdown of WACC Components

• Long-term bond rate: 4.0% – 4.5%
• Equity market risk premium: 6.0% – 7.0%
• Adjusted beta: 0.33 – 0.41
• Additional risk adjustment: 0.0% – 0.5%
• Debt-to-equity ratio: 0.06

What It Means for Investors

With a selected WACC of 7.3%, Smart Metering Systems PLC must ensure any new investment returns exceed this threshold to generate shareholder value. This level reflects an attractive low cost of capital.