ACV
Virtus AllianzGI Diversified Income & Convertible Fund
Price:  
20.43 
USD
Volume:  
26,568.00
United States | N/A
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ACV WACC - Weighted Average Cost of Capital

The WACC of Virtus AllianzGI Diversified Income & Convertible Fund (ACV) is 10.6%.

The Cost of Equity of Virtus AllianzGI Diversified Income & Convertible Fund (ACV) is 10.85%.
The Cost of Debt of Virtus AllianzGI Diversified Income & Convertible Fund (ACV) is 13.95%.

Range Selected
Cost of equity 9.60% - 12.10% 10.85%
Tax rate 26.20% - 27.00% 26.60%
Cost of debt 4.00% - 23.90% 13.95%
WACC 7.4% - 13.8% 10.6%
WACC

ACV WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.24 1.29
Additional risk adjustments 0.0% 0.5%
Cost of equity 9.60% 12.10%
Tax rate 26.20% 27.00%
Debt/Equity ratio 0.5 0.5
Cost of debt 4.00% 23.90%
After-tax WACC 7.4% 13.8%
Selected WACC 10.6%

ACV'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 ACV:

cost_of_equity (10.85%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.24) + 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.