SIR.L WACC - Weighted Average Cost of Capital

The WACC of Secure Income REIT Plc (SIR.L) is 7.7%.

The Cost of Equity of Secure Income REIT Plc (SIR.L) is 8.20%.

The Cost of Debt of Secure Income REIT Plc (SIR.L) is 7.00%.

	Range	Selected
Cost of equity	6.80% - 9.60%	8.20%
Tax rate	0.70% - 0.90%	0.80%
Cost of debt	5.10% - 8.90%	7.00%
WACC	6.1% - 9.3%	7.7%

WACC

SIR.L WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	5.3%	6.3%
Adjusted beta	0.71	0.89

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.80%	9.60%

Tax rate	0.70%	0.90%
Debt/Equity ratio	0.63	0.63
Cost of debt	5.10%	8.90%

After-tax WACC	6.1%	9.3%


Selected WACC	7.7%

SIR.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 SIR.L:

cost_of_equity (8.20%) = risk_free_rate (3.15%) + equity_risk_premium (5.80%) * adjusted_beta (0.71) + 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.