CLIG.L WACC - Weighted Average Cost of Capital
The WACC of City of London Investment Group PLC (CLIG.L) is 8.4%.
| Range | Selected | |
| Cost of equity | 7.5% - 9.7% | 8.6% |
| Tax rate | 21.8% - 22.6% | 22.2% |
| Cost of debt | 4.6% - 8.1% | 6.35% |
| WACC | 7.4% - 9.5% | 8.4% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.58 | 0.67 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.5% | 9.7% |
| Tax rate | 21.8% | 22.6% |
| Debt/Equity ratio | 0.03 | 0.03 |
| Cost of debt | 4.6% | 8.1% |
| After-tax WACC | 7.4% | 9.5% |
| Selected WACC | 8.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| CLIG.L | City of London Investment Group PLC | 0.03 | 0.5 | 0.48 |
| CAPMAN.HE | CapMan Oyj | 0.3 | 0.88 | 0.71 |
| GHE.L | Gresham House PLC | 0 | 1.4 | 1.4 |
| GOZDE.IS | Gozde Girisim Sermayesi Yatirim Ortakligi AS | 0.06 | 1.43 | 1.37 |
| IDIP.PA | IDI SCA | 0.1 | 0.31 | 0.28 |
| MCI.WA | MCI Capital SA | 0.19 | 0.45 | 0.39 |
| MTW.L | Mattioli Woods PLC | 0.01 | 0.27 | 0.27 |
| NEXTS.PA | Nextstage SCA | 0.08 | 0.29 | 0.27 |
| TAALA.HE | Taaleri Plc | 0.01 | 0.51 | 0.5 |
| TINC.BR | Tinc Comm VA | 0.01 | 0.34 | 0.34 |
| Low | High | |
| Unlevered beta | 0.37 | 0.49 |
| Relevered beta | 0.37 | 0.51 |
| Adjusted relevered beta | 0.58 | 0.67 |
CLIG.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 CLIG.L:
cost_of_equity (8.60%) = 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.