KKVL.L WACC - Weighted Average Cost of Capital
The WACC of KKV Secured Loan Fund Limited (KKVL.L) is 7.4%.
| Range | Selected | |
| Cost of equity | 8.9% - 12.4% | 10.65% |
| Tax rate | 19.0% - 19.0% | 19% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.5% - 8.2% | 7.4% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 5.3% | 6.3% |
| Adjusted beta | 1.12 | 1.33 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.9% | 12.4% |
| Tax rate | 19.0% | 19.0% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.5% | 8.2% |
| Selected WACC | 7.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| KKVL.L | KKV Secured Loan Fund Limited | 0.87 | 1.72 | 1.01 |
| AIF.L | Acorn Income Fund Ltd | 0.35 | 1.18 | 0.92 |
| AJOT.L | AVI Japan Opportunity Trust PLC | 0.07 | 0.5 | 0.47 |
| BERI.L | Blackrock Energy and Resources Income Trust PLC | 0.21 | 1.37 | 1.18 |
| BPET.L | BMO Private Equity Trust PLC | 0.12 | 0.85 | 0.77 |
| BRLA.L | Blackrock Latin American Investment Trust PLC | 0.02 | 1.35 | 1.33 |
| CMHY.L | City Merchants High Yield Trust Ltd | 0.07 | 0.5 | 0.47 |
| EBE.DE | aifinyo AG | 0.36 | -0.16 | -0.12 |
| EJFI.L | EJF Investments Ltd | 0.26 | 0.05 | 0.04 |
| MCT.L | Middlefield Canadian Income PCC | 0.23 | 0.65 | 0.55 |
| UKML.L | UK Mortgages Ltd | 8.7 | 0.71 | 0.09 |
| Low | High | |
| Unlevered beta | 0.47 | 0.77 |
| Relevered beta | 1.18 | 1.49 |
| Adjusted relevered beta | 1.12 | 1.33 |
KKVL.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 KKVL.L:
cost_of_equity (10.65%) = risk_free_rate (3.15%) + equity_risk_premium (5.80%) * adjusted_beta (1.12) + 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.