GRIT.L WACC - Weighted Average Cost of Capital
The WACC of Global Resources Investment Trust PLC (GRIT.L) is 6.5%.
| Range | Selected | |
| Cost of equity | 9.4% - 13.1% | 11.25% |
| Tax rate | 19.0% - 19.0% | 19% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.9% - 7.1% | 6.5% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.9 | 1.17 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.4% | 13.1% |
| Tax rate | 19.0% | 19.0% |
| Debt/Equity ratio | 1.93 | 1.93 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.9% | 7.1% |
| Selected WACC | 6.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| GRIT.L | Global Resources Investment Trust PLC | 1.93 | -1.46 | -0.57 |
| BLP.L | Blue Planet Investment Trust PLC | 0.32 | 0.52 | 0.41 |
| CGW.L | Chelverton Growth Trust PLC | 0.11 | 0.19 | 0.18 |
| FGT.L | Finsbury Growth & Income Trust PLC | 0.02 | 0.7 | 0.68 |
| GV2O.L | Gresham House Renewable Energy VCT 2 PLC | 0.12 | -0.06 | -0.06 |
| MMM.L | Mining Minerals & Metals PLC | 0.03 | 1.04 | 1.02 |
| NBPE.L | NB Private Equity Partners Ltd | 0.1 | 1.28 | 1.19 |
| VCBC.L | Vertu Capital Ltd | 1.53 | 0.98 | 0.44 |
| Low | High | |
| Unlevered beta | 0.37 | 0.49 |
| Relevered beta | 0.85 | 1.25 |
| Adjusted relevered beta | 0.9 | 1.17 |
GRIT.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 GRIT.L:
cost_of_equity (11.25%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.9) + 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.