AIR.L WACC - Weighted Average Cost of Capital
The WACC of Air Partner PLC (AIR.L) is 8.6%.
| Range | Selected | |
| Cost of equity | 7.6% - 10.4% | 9% |
| Tax rate | 29.5% - 34.1% | 31.8% |
| Cost of debt | 4.0% - 6.7% | 5.35% |
| WACC | 7.2% - 9.9% | 8.6% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 5.3% | 6.3% |
| Adjusted beta | 0.87 | 1.02 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.6% | 10.4% |
| Tax rate | 29.5% | 34.1% |
| Debt/Equity ratio | 0.09 | 0.09 |
| Cost of debt | 4.0% | 6.7% |
| After-tax WACC | 7.2% | 9.9% |
| Selected WACC | 8.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| AIR.L | Air Partner PLC | 0.09 | 1.04 | 0.99 |
| AEGN.AT | Aegean Airlines SA | 1.26 | 1.21 | 0.65 |
| ENT.WA | Enter Air SA | 1.46 | 0.52 | 0.26 |
| GMAA.L | Gama Aviation PLC | 1.05 | -0.72 | -0.42 |
| ICEAIR.IC | Icelandair Group hf | 2.03 | 0.95 | 0.4 |
| NAS.OL | Norwegian Air Shuttle ASA | 1.08 | -0.08 | -0.05 |
| PGSUS.IS | Pegasus Hava Tasimaciligi AS | 2.14 | 1.82 | 0.75 |
| ALGT | Allegiant Travel Co | 2.07 | 1.38 | 0.58 |
| CPA | Copa Holdings SA | 0.49 | 0.55 | 0.41 |
| JBLU | JetBlue Airways Corp | 4.94 | 1.21 | 0.28 |
| Low | High | |
| Unlevered beta | 0.35 | 0.48 |
| Relevered beta | 0.81 | 1.03 |
| Adjusted relevered beta | 0.87 | 1.02 |
AIR.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 AIR.L:
cost_of_equity (9.00%) = risk_free_rate (3.15%) + equity_risk_premium (5.80%) * adjusted_beta (0.87) + 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.