HGT.L WACC - Weighted Average Cost of Capital
The WACC of HgCapital Trust PLC (HGT.L) is 10.1%.
| Range | Selected | |
| Cost of equity | 9.1% - 11.5% | 10.3% |
| Tax rate | 19.0% - 19.0% | 19% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 8.9% - 11.2% | 10.1% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.86 | 0.93 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.1% | 11.5% |
| Tax rate | 19.0% | 19.0% |
| Debt/Equity ratio | 0.04 | 0.04 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 8.9% | 11.2% |
| Selected WACC | 10.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| HGT.L | HgCapital Trust PLC | 0.04 | 0.58 | 0.57 |
| BRWM.L | Blackrock World Mining Trust PLC | 0.16 | 1.37 | 1.21 |
| EWI.L | Edinburgh Worldwide Investment Trust PLC | 0.16 | 0.88 | 0.77 |
| IEM.L | Impax Environmental Markets PLC | 0.11 | 0.92 | 0.84 |
| JAM.L | JPMorgan American Investment Trust PLC | 0.05 | 0.95 | 0.91 |
| JFJ.L | JPMorgan Japanese Investment Trust PLC | 0.13 | 0.75 | 0.68 |
| PIN.L | Pantheon International PLC | 0.19 | 1.11 | 0.96 |
| SDP.L | Schroder Asiapacific Fund PLC | 0.02 | 0.77 | 0.76 |
| TMPL.L | Temple Bar Investment Trust PLC | 0.09 | 1.7 | 1.58 |
| USA.L | Baillie Gifford US Growth Trust PLC | 0.06 | 0.57 | 0.54 |
| Low | High | |
| Unlevered beta | 0.77 | 0.87 |
| Relevered beta | 0.79 | 0.9 |
| Adjusted relevered beta | 0.86 | 0.93 |
HGT.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 HGT.L:
cost_of_equity (10.30%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.86) + 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.