DEVC.L WACC - Weighted Average Cost of Capital
The WACC of Draper Esprit VCT PLC (DEVC.L) is 8.3%.
| Range | Selected | |
| Cost of equity | 10.7% - 14.4% | 12.55% |
| Tax rate | 19.0% - 19.0% | 19% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 7.4% - 9.2% | 8.3% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 5.3% | 6.3% |
| Adjusted beta | 1.46 | 1.64 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 10.7% | 14.4% |
| Tax rate | 19.0% | 19.0% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 7.4% | 9.2% |
| Selected WACC | 8.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| DEVC.L | Draper Esprit VCT PLC | 0.99 | 0.36 | 0.2 |
| ALAI.L | Aberdeen Latin American Income Fund Ltd | 0.17 | 3.55 | 3.12 |
| ASCI.L | Aberdeen Smaller Companies Income Trust PLC | 0.13 | 1.37 | 1.24 |
| BLP.L | Blue Planet Investment Trust PLC | 0.32 | 0.52 | 0.41 |
| BRIG.L | Blackrock Income and Growth Investment Trust PLC | 0.1 | 0.91 | 0.84 |
| GCL.L | Geiger Counter Ltd | 0.25 | 3.55 | 2.96 |
| JEFI.L | Jupiter Emerging & Frontier Income Trust Plc | 0.12 | 1.07 | 0.97 |
| SDV.L | Chelverton UK Dividend Trust PLC | 0.59 | 1.95 | 1.32 |
| Low | High | |
| Unlevered beta | 0.94 | 1.25 |
| Relevered beta | 1.69 | 1.96 |
| Adjusted relevered beta | 1.46 | 1.64 |
DEVC.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 DEVC.L:
cost_of_equity (12.55%) = risk_free_rate (3.15%) + equity_risk_premium (5.80%) * adjusted_beta (1.46) + 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.