The WACC of Globaltrans Investment PLC (GLTR.L) is 6.4%.
| Range | Selected | |
| Cost of equity | 5.70% - 9.30% | 7.50% |
| Tax rate | 23.50% - 24.20% | 23.85% |
| Cost of debt | 4.00% - 8.50% | 6.25% |
| WACC | 4.7% - 8.2% | 6.4% |
| Category | Low | High |
| Long-term bond rate | 1.7% | 2.2% |
| Equity market risk premium | 4.8% | 5.8% |
| Adjusted beta | 0.83 | 1.13 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.70% | 9.30% |
| Tax rate | 23.50% | 24.20% |
| Debt/Equity ratio | 0.6 | 0.6 |
| Cost of debt | 4.00% | 8.50% |
| After-tax WACC | 4.7% | 8.2% |
| Selected WACC | 6.4% | |
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 GLTR.L:
cost_of_equity (7.50%) = risk_free_rate (1.95%) + equity_risk_premium (5.30%) * adjusted_beta (0.83) + 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.