AA4.L WACC - Weighted Average Cost of Capital

The WACC of Amedeo Air Four Plus Ltd (AA4.L) is 7.8%.

The Cost of Equity of Amedeo Air Four Plus Ltd (AA4.L) is 14.20%.

The Cost of Debt of Amedeo Air Four Plus Ltd (AA4.L) is 6.60%.

	Range	Selected
Cost of equity	8.60% - 19.80%	14.20%
Tax rate	0.10% - 0.10%	0.10%
Cost of debt	4.00% - 9.20%	6.60%
WACC	4.7% - 10.9%	7.8%

WACC

AA4.L WACC calculation

Category	Low	High

Long-term bond rate	4.0%	4.5%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.77	2.13

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.60%	19.80%

Tax rate	0.10%	0.10%
Debt/Equity ratio	5.35	5.35
Cost of debt	4.00%	9.20%

After-tax WACC	4.7%	10.9%


Selected WACC	7.8%

AA4.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 AA4.L:

cost_of_equity (14.20%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.77) + 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.