BCI.L WACC - Weighted Average Cost of Capital
The WACC of BMO Capital and Income Investment Trust PLC (BCI.L) is 9.8%.
| Range | Selected | |
| Cost of equity | 8.9% - 11.5% | 10.2% |
| Tax rate | 0.0% - 0.1% | 0.05% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 8.5% - 11.0% | 9.8% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 5.3% | 6.3% |
| Adjusted beta | 1.11 | 1.2 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.9% | 11.5% |
| Tax rate | 0.0% | 0.1% |
| Debt/Equity ratio | 0.08 | 0.08 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 8.5% | 11.0% |
| Selected WACC | 9.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| BCI.L | BMO Capital and Income Investment Trust PLC | 0.08 | 1.3 | 1.21 |
| AAS.L | Aberdeen Standard Asia Focus PLC | 0.16 | 0.89 | 0.77 |
| ANII.L | Aberdeen New India Investment Trust PLC | 0.07 | 0.67 | 0.63 |
| ASIT.L | Aberforth Split Level Income Trust PLC | 0.27 | 3.55 | 2.8 |
| BGUK.L | Baillie Gifford UK Growth Fund PLC | 0.07 | 1.27 | 1.19 |
| JCH.L | JPmorgan Claverhouse Investment Trust PLC | 0.1 | 1.19 | 1.09 |
| JPEI.L | Jpmorgan Elect PLC | 0.02 | 1.15 | 1.13 |
| LWI.L | Lowland Investment Company P L C | 0.16 | 1.52 | 1.32 |
| SCP.L | Schroder UK Mid Cap Fund PLC | 0.12 | 1.73 | 1.54 |
| SST.L | Scottish Oriental Smaller Companies Trust PLC | 0.09 | 0.67 | 0.62 |
| Low | High | |
| Unlevered beta | 1.11 | 1.2 |
| Relevered beta | 1.16 | 1.3 |
| Adjusted relevered beta | 1.11 | 1.2 |
BCI.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 BCI.L:
cost_of_equity (10.20%) = risk_free_rate (3.15%) + equity_risk_premium (5.80%) * adjusted_beta (1.11) + 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.