ATR.L WACC - Weighted Average Cost of Capital

The WACC of Schroder Asian Total Return Investment Company PLC (ATR.L) is 10.8%.

The Cost of Equity of Schroder Asian Total Return Investment Company PLC (ATR.L) is 11.20%.

The Cost of Debt of Schroder Asian Total Return Investment Company PLC (ATR.L) is 4.30%.

	Range	Selected
Cost of equity	9.90% - 12.50%	11.20%
Tax rate	2.10% - 3.50%	2.80%
Cost of debt	4.00% - 4.60%	4.30%
WACC	9.6% - 12.0%	10.8%

WACC

ATR.L WACC calculation

Category	Low	High

Long-term bond rate	4.0%	4.5%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1	1.08

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.90%	12.50%

Tax rate	2.10%	3.50%
Debt/Equity ratio	0.07	0.07
Cost of debt	4.00%	4.60%

After-tax WACC	9.6%	12.0%


Selected WACC	10.8%

ATR.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 ATR.L:

cost_of_equity (11.20%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (1) + 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.