BAF.L WACC - Weighted Average Cost of Capital
The WACC of British and American Investment Trust PLC (BAF.L) is 6.8%.
| Range | Selected | |
| Cost of equity | 6.7% - 8.4% | 7.55% |
| Tax rate | 2.3% - 2.9% | 2.6% |
| Cost of debt | 4.0% - 4.6% | 4.3% |
| WACC | 6.0% - 7.5% | 6.8% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.45 | 0.49 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.7% | 8.4% |
| Tax rate | 2.3% | 2.9% |
| Debt/Equity ratio | 0.31 | 0.31 |
| Cost of debt | 4.0% | 4.6% |
| After-tax WACC | 6.0% | 7.5% |
| Selected WACC | 6.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| BAF.L | British and American Investment Trust PLC | 0.31 | 1.31 | 1.01 |
| 06N.WA | Magna Polonia SA | 0.03 | 0.2 | 0.19 |
| ANT.BR | Immo Antares NV | 8.64 | 0.35 | 0.04 |
| BRES.L | Blencowe Resources PLC | 0.09 | 0.09 | 0.08 |
| CGW.L | Chelverton Growth Trust PLC | 0.11 | 0.19 | 0.17 |
| CRTM.L | Critical Metals PLC | 4.43 | -0.34 | -0.06 |
| MMM.L | Mining Minerals & Metals PLC | 0.03 | 1.04 | 1.01 |
| SURE.L | Sure Ventures PLC | 0.06 | 0.12 | 0.11 |
| TAYN.PA | Societe de Tayninh SA | 0 | 0.16 | 0.16 |
| VCBC.L | Vertu Capital Ltd | 1.53 | 0.98 | 0.39 |
| Low | High | |
| Unlevered beta | 0.14 | 0.18 |
| Relevered beta | 0.18 | 0.24 |
| Adjusted relevered beta | 0.45 | 0.49 |
BAF.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 BAF.L:
cost_of_equity (7.55%) = 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.