SCF.L WACC - Weighted Average Cost of Capital

The WACC of Schroder Income Growth Fund PLC (SCF.L) is 9.2%.

The Cost of Equity of Schroder Income Growth Fund PLC (SCF.L) is 9.85%.

The Cost of Debt of Schroder Income Growth Fund PLC (SCF.L) is 4.25%.

	Range	Selected
Cost of equity	8.70% - 11.00%	9.85%
Tax rate	0.20% - 0.50%	0.35%
Cost of debt	4.00% - 4.50%	4.25%
WACC	8.1% - 10.2%	9.2%

WACC

SCF.L WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	5.3%	6.3%
Adjusted beta	1.07	1.11

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.70%	11.00%

Tax rate	0.20%	0.50%
Debt/Equity ratio	0.13	0.13
Cost of debt	4.00%	4.50%

After-tax WACC	8.1%	10.2%


Selected WACC	9.2%

SCF.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 SCF.L:

cost_of_equity (9.85%) = risk_free_rate (3.15%) + equity_risk_premium (5.80%) * adjusted_beta (1.07) + 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.