AXI.L WACC - Weighted Average Cost of Capital

The WACC of Axiom European Financial Debt Fund Ltd (AXI.L) is 9.4%.

The Cost of Equity of Axiom European Financial Debt Fund Ltd (AXI.L) is 8.85%.

The Cost of Debt of Axiom European Financial Debt Fund Ltd (AXI.L) is 35.30%.

	Range	Selected
Cost of equity	7.90% - 9.80%	8.85%
Tax rate	19.00% - 19.00%	19.00%
Cost of debt	7.10% - 63.50%	35.30%
WACC	7.9% - 11.0%	9.4%

WACC

AXI.L WACC calculation

Category	Low	High

Long-term bond rate	4.0%	4.5%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.66	0.69

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.90%	9.80%

Tax rate	19.00%	19.00%
Debt/Equity ratio	0.03	0.03
Cost of debt	7.10%	63.50%

After-tax WACC	7.9%	11.0%


Selected WACC	9.4%

AXI.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 AXI.L:

cost_of_equity (8.85%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.66) + 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.