MCT.L WACC - Weighted Average Cost of Capital
The WACC of Middlefield Canadian Income PCC (MCT.L) is 7.9%.
| Range | Selected | |
| Cost of equity | 7.3% - 9.9% | 8.6% |
| Tax rate | 6.1% - 8.2% | 7.15% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.9% - 9.0% | 7.9% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.56 | 0.71 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.3% | 9.9% |
| Tax rate | 6.1% | 8.2% |
| Debt/Equity ratio | 0.21 | 0.21 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.9% | 9.0% |
| Selected WACC | 7.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| MCT.L | Middlefield Canadian Income PCC | 0.21 | 0.65 | 0.54 |
| AIF.L | Acorn Income Fund Ltd | 0.35 | 1.18 | 0.89 |
| AJOT.L | AVI Japan Opportunity Trust PLC | 0.07 | 0.5 | 0.47 |
| BRLA.L | Blackrock Latin American Investment Trust PLC | 0.05 | 1.35 | 1.29 |
| 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 | 0.23 | 0.05 | 0.04 |
| MPLF.L | Marble Point Loan Financing Ltd | 0.39 | -0.16 | -0.12 |
| RMDL.L | RM Secured Direct Lending PLC | 0.2 | 0.51 | 0.43 |
| UKML.L | UK Mortgages Ltd | 8.7 | 0.71 | 0.08 |
| Low | High | |
| Unlevered beta | 0.29 | 0.47 |
| Relevered beta | 0.34 | 0.57 |
| Adjusted relevered beta | 0.56 | 0.71 |
MCT.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 MCT.L:
cost_of_equity (8.60%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.56) + 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.