AIE.L
Ashoka India Equity Investment Trust PLC
Price:  
262.50 
GBP
Volume:  
202,305.00
United Kingdom | N/A
Valuation
Overview
Financials
Forecast
Compare
Historical Price
SolvencyDividends
Transactions
People

AIE.L WACC - Weighted Average Cost of Capital

The WACC of Ashoka India Equity Investment Trust PLC (AIE.L) is 7.6%.

The Cost of Equity of Ashoka India Equity Investment Trust PLC (AIE.L) is 11.00%.
The Cost of Debt of Ashoka India Equity Investment Trust PLC (AIE.L) is 5.00%.

Range Selected
Cost of equity 9.60% - 12.40% 11.00%
Tax rate 16.10% - 16.80% 16.45%
Cost of debt 5.00% - 5.00% 5.00%
WACC 6.9% - 8.3% 7.6%
WACC

AIE.L WACC calculation

Category Low High
Long-term bond rate 4.0% 4.5%
Equity market risk premium 6.0% 7.0%
Adjusted beta 0.94 1.06
Additional risk adjustments 0.0% 0.5%
Cost of equity 9.60% 12.40%
Tax rate 16.10% 16.80%
Debt/Equity ratio 1 1
Cost of debt 5.00% 5.00%
After-tax WACC 6.9% 8.3%
Selected WACC 7.6%

AIE.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 AIE.L:

cost_of_equity (11.00%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.94) + 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.