HICL.L WACC - Weighted Average Cost of Capital
The WACC of HICL Infrastructure PLC (HICL.L) is 8.0%.
| Range | Selected | |
| Cost of equity | 10.0% - 13.8% | 11.9% |
| Tax rate | 19.0% - 19.0% | 19% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 7.0% - 8.9% | 8.0% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 1 | 1.27 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 10.0% | 13.8% |
| Tax rate | 19.0% | 19.0% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 7.0% | 8.9% |
| Selected WACC | 8.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| HICL.L | HICL Infrastructure PLC | 0.91 | 0.28 | 0.16 |
| 3IN.L | 3I Infrastructure PLC | 0.17 | 0.58 | 0.51 |
| ATST.L | Alliance Trust PLC | 0.05 | 0.93 | 0.9 |
| FCSS.L | Fidelity China Special Situations PLC | 0.01 | 0.55 | 0.55 |
| INPP.L | International Public Partnerships Ltd | 0.01 | 0.28 | 0.27 |
| MNKS.L | Monks Investment Trust PLC | 0.1 | 0.84 | 0.78 |
| MYI.L | Murray International Trust PLC | 0.07 | 1.07 | 1.01 |
| PCT.L | Polar Capital Technology Trust PLC | 0.01 | 0.57 | 0.56 |
| SONG.L | Hipgnosis Songs Fund Ltd | 0.49 | 0.39 | 0.28 |
| TEM.L | Templeton Emerging Markets Investment Trust PLC | 0.06 | 0.81 | 0.77 |
| WTAN.L | Witan Investment Trust PLC | 0.15 | 1 | 0.89 |
| Low | High | |
| Unlevered beta | 0.55 | 0.77 |
| Relevered beta | 1 | 1.4 |
| Adjusted relevered beta | 1 | 1.27 |
HICL.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 HICL.L:
cost_of_equity (11.90%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (1) + 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.