AVAP.L WACC - Weighted Average Cost of Capital
The WACC of Avation PLC (AVAP.L) is 7.8%.
| Range | Selected | |
| Cost of equity | 6.7% - 8.9% | 7.8% |
| Tax rate | 22.7% - 27.8% | 25.25% |
| Cost of debt | 5.4% - 15.8% | 10.6% |
| WACC | 4.6% - 10.9% | 7.8% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.45 | 0.55 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.7% | 8.9% |
| Tax rate | 22.7% | 27.8% |
| Debt/Equity ratio | 4.73 | 4.73 |
| Cost of debt | 5.4% | 15.8% |
| After-tax WACC | 4.6% | 10.9% |
| Selected WACC | 7.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| AVAP.L | Avation PLC | 4.73 | 0.78 | 0.17 |
| AA4.L | Amedeo Air Four Plus Ltd | 6.68 | 0.04 | 0.01 |
| ALUPG.PA | Upergy | 0.77 | -0.79 | -0.5 |
| ASY.L | Andrews Sykes Group PLC | 0.08 | 0.09 | 0.09 |
| DPA.L | DP Aircraft I Ltd | 2.41 | -0.58 | -0.2 |
| GALQ.MC | General de Alquiler de Maquinaria SA | 2.1 | 0.8 | 0.31 |
| HRS.WA | Herkules SA | 1.28 | 0.69 | 0.35 |
| K1R.DE | KROMI Logistik AG | 0.07 | 0.06 | 0.06 |
| KCH.WA | Krakchemia SA | 0.42 | -0.42 | -0.32 |
| XYLEK.AT | INTERGOUNT XYLEMPORIA ATENE | 2.51 | 0.19 | 0.06 |
| Low | High | |
| Unlevered beta | 0.04 | 0.07 |
| Relevered beta | 0.18 | 0.33 |
| Adjusted relevered beta | 0.45 | 0.55 |
AVAP.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 AVAP.L:
cost_of_equity (7.80%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.45) + 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.