The WACC of Grit Real Estate Income Group Ltd (GR1T.L) is 14.0%.
| Range | Selected | |
| Cost of equity | 12.00% - 17.00% | 14.50% |
| Tax rate | 2.70% - 10.20% | 6.45% |
| Cost of debt | 9.40% - 21.00% | 15.20% |
| WACC | 9.3% - 18.7% | 14.0% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 1.33 | 1.72 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 12.00% | 17.00% |
| Tax rate | 2.70% | 10.20% |
| Debt/Equity ratio | 15.6 | 15.6 |
| Cost of debt | 9.40% | 21.00% |
| After-tax WACC | 9.3% | 18.7% |
| Selected WACC | 14.0% | |
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 GR1T.L:
cost_of_equity (14.50%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (1.33) + 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.