APEO.L WACC - Weighted Average Cost of Capital

The WACC of abrdn Private Equity Opportunities Trust plc (APEO.L) is 10.6%.

The Cost of Equity of abrdn Private Equity Opportunities Trust plc (APEO.L) is 11.30%.

The Cost of Debt of abrdn Private Equity Opportunities Trust plc (APEO.L) is 4.50%.

	Range	Selected
Cost of equity	10.30% - 12.30%	11.30%
Tax rate	0.70% - 0.80%	0.75%
Cost of debt	4.50% - 4.50%	4.50%
WACC	9.6% - 11.5%	10.6%

WACC

APEO.L WACC calculation

Category	Low	High

Long-term bond rate	3.7%	4.2%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.09	1.09

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.30%	12.30%

Tax rate	0.70%	0.80%
Debt/Equity ratio	0.12	0.12
Cost of debt	4.50%	4.50%

After-tax WACC	9.6%	11.5%


Selected WACC	10.6%

APEO.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 APEO.L:

cost_of_equity (11.30%) = risk_free_rate (3.95%) + equity_risk_premium (6.50%) * adjusted_beta (1.09) + 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.