The WACC of British Land Company PLC (BLND.L) is 7.1%.
Range | Selected | |
Cost of equity | 7.4% - 10.3% | 8.85% |
Tax rate | 0.9% - 1.8% | 1.35% |
Cost of debt | 4.0% - 5.5% | 4.75% |
WACC | 5.9% - 8.2% | 7.1% |
Category | Low | High |
Long-term bond rate | 4.0% | 4.5% |
Equity market risk premium | 6.0% | 7.0% |
Adjusted beta | 0.58 | 0.76 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 7.4% | 10.3% |
Tax rate | 0.9% | 1.8% |
Debt/Equity ratio | 0.76 | 0.76 |
Cost of debt | 4.0% | 5.5% |
After-tax WACC | 5.9% | 8.2% |
Selected WACC | 7.1% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
BLND.L | British Land Company PLC | 0.76 | 0.98 | 0.56 |
CAPC.L | Capital & Counties Properties PLC | 0.67 | 1.36 | 0.82 |
CARM.PA | Carmila SA | 1.15 | 0.45 | 0.21 |
ECMPA.AS | Eurocommercial Properties NV | 1.06 | 0.5 | 0.24 |
HMSO.L | Hammerson PLC | 1.06 | 1.29 | 0.63 |
LI.PA | Klepierre SA | 0.84 | 0.22 | 0.12 |
MERY.PA | Mercialys SA | 1.28 | 0.14 | 0.06 |
RET.BR | Retail Estates NV | 0.95 | 0.41 | 0.21 |
SHB.L | Shaftesbury PLC | 0.6 | 0.95 | 0.6 |
WHA.AS | Wereldhave NV | 1.21 | 0.47 | 0.21 |
Low | High | |
Unlevered beta | 0.21 | 0.37 |
Relevered beta | 0.37 | 0.64 |
Adjusted relevered beta | 0.58 | 0.76 |
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 BLND.L:
cost_of_equity (8.85%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.58) + 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.