BUR.L WACC - Weighted Average Cost of Capital
The WACC of Burford Capital Ltd (BUR.L) is 8.3%.
| Range | Selected | |
| Cost of equity | 9.4% - 11.7% | 10.55% |
| Tax rate | 10.1% - 11.6% | 10.85% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 7.6% - 9.0% | 8.3% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.91 | 0.96 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.4% | 11.7% |
| Tax rate | 10.1% | 11.6% |
| Debt/Equity ratio | 0.59 | 0.59 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 7.6% | 9.0% |
| Selected WACC | 8.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| BUR.L | Burford Capital Ltd | 0.59 | 1.83 | 1.2 |
| ECN.TO | ECN Capital Corp | 0.98 | 0.97 | 0.52 |
| BFF.MI | BFF Bank SpA | 0.37 | 0.77 | 0.58 |
| COMB.BR | Compagnie du Bois Sauvage SA | 0.28 | 0.68 | 0.55 |
| DOV.MI | doValue SpA | 1.81 | 1.53 | 0.58 |
| IF.MI | Banca IFIS SpA | 4.26 | 1.13 | 0.24 |
| PRF.WA | PragmaGO SA | 0.81 | 1.13 | 0.66 |
| QNBFL.IS | QNB Finans Finansal Kiralama AS | 0.7 | 1.29 | 0.8 |
| TIME.L | Time Finance PLC | 0.03 | 0.98 | 0.95 |
| TSKB.IS | Turkiye Sinai Kalkinma Bankasi AS | 10.5 | 0.64 | 0.06 |
| Low | High | |
| Unlevered beta | 0.57 | 0.61 |
| Relevered beta | 0.87 | 0.94 |
| Adjusted relevered beta | 0.91 | 0.96 |
BUR.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 BUR.L:
cost_of_equity (10.55%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.91) + 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.