PCTN.L WACC - Weighted Average Cost of Capital

The WACC of Picton Property Income Ltd (PCTN.L) is 7.6%.

The Cost of Equity of Picton Property Income Ltd (PCTN.L) is 9.50%.

The Cost of Debt of Picton Property Income Ltd (PCTN.L) is 5.30%.

	Range	Selected
Cost of equity	7.80% - 11.20%	9.50%
Tax rate	19.00% - 19.00%	19.00%
Cost of debt	4.40% - 6.20%	5.30%
WACC	6.3% - 9.0%	7.6%

WACC

PCTN.L WACC calculation

Category	Low	High

Long-term bond rate	4.0%	4.5%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.64	0.89

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.80%	11.20%

Tax rate	19.00%	19.00%
Debt/Equity ratio	0.57	0.57
Cost of debt	4.40%	6.20%

After-tax WACC	6.3%	9.0%


Selected WACC	7.6%

PCTN.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 PCTN.L:

cost_of_equity (9.50%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.64) + 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.