SAFE.L WACC - Weighted Average Cost of Capital
The WACC of Safestore Holdings PLC (SAFE.L) is 7.4%.
| Range | Selected | |
| Cost of equity | 7.8% - 10.9% | 9.35% |
| Tax rate | 6.2% - 6.8% | 6.5% |
| Cost of debt | 4.0% - 5.5% | 4.75% |
| WACC | 6.2% - 8.6% | 7.4% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.64 | 0.85 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.8% | 10.9% |
| Tax rate | 6.2% | 6.8% |
| Debt/Equity ratio | 0.67 | 0.67 |
| Cost of debt | 4.0% | 5.5% |
| After-tax WACC | 6.2% | 8.6% |
| Selected WACC | 7.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| SAFE.L | Safestore Holdings PLC | 0.67 | 0.96 | 0.59 |
| ARG.PA | Argan SA | 1.28 | 0.68 | 0.31 |
| BYG.L | Big Yellow Group PLC | 0.21 | 0.57 | 0.47 |
| CFI.PA | CFI-Compagnie Fonciere Internationale SCA | 0.11 | -2.08 | -1.88 |
| GPOR.L | Great Portland Estates PLC | 0.29 | 0.75 | 0.59 |
| LMP.L | Londonmetric Property PLC | 0.52 | 0.78 | 0.53 |
| PHP.L | Primary Health Properties PLC | 1 | 0.46 | 0.24 |
| PRODEA.AT | Prontea Ependyseon Se Akiniti Periousia AE | 0.85 | -0.26 | -0.14 |
| WKP.L | Workspace Group PLC | 1.13 | 0.98 | 0.47 |
| FCPT | Four Corners Property Trust Inc | 0.42 | 0.17 | 0.12 |
| Low | High | |
| Unlevered beta | 0.28 | 0.47 |
| Relevered beta | 0.46 | 0.78 |
| Adjusted relevered beta | 0.64 | 0.85 |
SAFE.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 SAFE.L:
cost_of_equity (9.35%) = 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.