EVN
Eaton Vance Municipal Income Trust
Price:  
10.33 
USD
Volume:  
99,198.00
United States | N/A
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EVN WACC - Weighted Average Cost of Capital

The WACC of Eaton Vance Municipal Income Trust (EVN) is 7.9%.

The Cost of Equity of Eaton Vance Municipal Income Trust (EVN) is 9.75%.
The Cost of Debt of Eaton Vance Municipal Income Trust (EVN) is 4.55%.

Range Selected
Cost of equity 7.90% - 11.60% 9.75%
Tax rate 26.20% - 27.00% 26.60%
Cost of debt 4.00% - 5.10% 4.55%
WACC 6.4% - 9.3% 7.9%
WACC

EVN WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.87 1.21
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.90% 11.60%
Tax rate 26.20% 27.00%
Debt/Equity ratio 0.42 0.42
Cost of debt 4.00% 5.10%
After-tax WACC 6.4% 9.3%
Selected WACC 7.9%

EVN'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 EVN:

cost_of_equity (9.75%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.87) + 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.