ASCI.L WACC - Weighted Average Cost of Capital

The WACC of Aberdeen Smaller Companies Income Trust PLC (ASCI.L) is 10.3%.

The Cost of Equity of Aberdeen Smaller Companies Income Trust PLC (ASCI.L) is 10.90%.

The Cost of Debt of Aberdeen Smaller Companies Income Trust PLC (ASCI.L) is 5.50%.

	Range	Selected
Cost of equity	9.70% - 12.10%	10.90%
Tax rate	0.10% - 0.10%	0.10%
Cost of debt	4.00% - 7.00%	5.50%
WACC	9.1% - 11.5%	10.3%

WACC

ASCI.L WACC calculation

Category	Low	High

Long-term bond rate	4.0%	4.5%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.96	1.02

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.70%	12.10%

Tax rate	0.10%	0.10%
Debt/Equity ratio	0.13	0.13
Cost of debt	4.00%	7.00%

After-tax WACC	9.1%	11.5%


Selected WACC	10.3%

ASCI.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 ASCI.L:

cost_of_equity (10.90%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.96) + 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.