NBDD.L WACC - Weighted Average Cost of Capital
The WACC of NB Distressed Debt Investment Fund Ltd (NBDD.L) is 7.4%.
| Range | Selected | |
| Cost of equity | 6.6% - 13.0% | 9.8% |
| Tax rate | 0.0% - 0.2% | 0.1% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.8% - 9.0% | 7.4% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 5.5% | 6.5% |
| Adjusted beta | 0.48 | 1.23 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.6% | 13.0% |
| Tax rate | 0.0% | 0.2% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.8% | 9.0% |
| Selected WACC | 7.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| NBDD.L | NB Distressed Debt Investment Fund Ltd | 0.93 | 0.15 | 0.08 |
| GPM.L | Golden Prospect Precious Metals Ltd | 0.07 | 0.8 | 0.74 |
| GV1O.L | Gresham House Renewable Energy VCT 1 PLC | 0.12 | -0.05 | -0.05 |
| JGC.L | Jupiter Green Investment Trust PLC | 0.06 | 0.9 | 0.85 |
| MPO.L | Macau Property Opportunities Fund Ltd | 4.07 | 0.56 | 0.11 |
| PMGR.L | Premier Miton Global Renewables Trust PLC | 0.98 | 1.34 | 0.68 |
| ZAIM.L | Zaim Credit Systems PLC | 1.17 | -0.79 | -0.36 |
| Low | High | |
| Unlevered beta | 0.09 | 0.45 |
| Relevered beta | 0.22 | 1.34 |
| Adjusted relevered beta | 0.48 | 1.23 |
NBDD.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 NBDD.L:
cost_of_equity (9.80%) = risk_free_rate (4.25%) + equity_risk_premium (6.00%) * adjusted_beta (0.48) + 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.