BVT.L WACC - Weighted Average Cost of Capital
The WACC of Baronsmead Venture Trust PLC (BVT.L) is 8.8%.
| Range | Selected | |
| Cost of equity | 11.4% - 15.7% | 13.55% |
| Tax rate | 19.0% - 19.0% | 19% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 7.7% - 9.9% | 8.8% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 1.24 | 1.53 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 11.4% | 15.7% |
| Tax rate | 19.0% | 19.0% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 7.7% | 9.9% |
| Selected WACC | 8.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| BVT.L | Baronsmead Venture Trust PLC | 1.11 | 0.3 | 0.16 |
| AJOT.L | AVI Japan Opportunity Trust PLC | 0.07 | 0.5 | 0.47 |
| AUGM.L | Augmentum Fintech PLC | 0 | 1.43 | 1.42 |
| BMPG.L | BMO Managed Portfolio Trust PLC | 0.03 | 0.86 | 0.84 |
| BRFI.L | BlackRock Frontiers Investment Trust PLC | 0 | 1.03 | 1.03 |
| CMHY.L | City Merchants High Yield Trust Ltd | 0.07 | 0.5 | 0.47 |
| JMI.L | JPmorgan Smaller Companies Investment Trust PLC | 0.12 | 1.68 | 1.53 |
| JUS.L | Jupiter US Smaller Companies PLC | 0.02 | 1.11 | 1.09 |
| NCYF.L | CQS New City High Yield Fund Ltd | 0.11 | 0.79 | 0.72 |
| STS.L | Securities Trust Of Scotland PLC | 0.05 | 0.76 | 0.73 |
| Low | High | |
| Unlevered beta | 0.72 | 0.91 |
| Relevered beta | 1.36 | 1.79 |
| Adjusted relevered beta | 1.24 | 1.53 |
BVT.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 BVT.L:
cost_of_equity (13.55%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (1.24) + 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.