TAM.L WACC - Weighted Average Cost of Capital
The WACC of Tatton Asset Management PLC (TAM.L) is 7.5%.
| Range | Selected | |
| Cost of equity | 9.2% - 12.6% | 10.9% |
| Tax rate | 17.4% - 18.3% | 17.85% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.6% - 8.4% | 7.5% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.86 | 1.09 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.2% | 12.6% |
| Tax rate | 17.4% | 18.3% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.6% | 8.4% |
| Selected WACC | 7.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| TAM.L | Tatton Asset Management PLC | 0 | 0.53 | 0.53 |
| ALPN.SW | Alpine Select AG | 0.01 | 0.36 | 0.36 |
| CLIG.L | City of London Investment Group PLC | 0.03 | 0.56 | 0.54 |
| EVLI.HE | Evli Pankki Oyj | 0.22 | 0.58 | 0.49 |
| GHE.L | Gresham House PLC | 0 | 1.4 | 1.4 |
| GOZDE.IS | Gozde Girisim Sermayesi Yatirim Ortakligi AS | 0.06 | 1.43 | 1.36 |
| MCI.WA | MCI Capital SA | 0.21 | 0.41 | 0.35 |
| MERC.L | Mercia Asset Management PLC | 0.01 | 1.42 | 1.41 |
| NEXTS.PA | Nextstage SCA | 0.08 | 0.29 | 0.27 |
| REC.L | Record PLC | 0 | 0.24 | 0.24 |
| TITAN.HE | Titanium Oyj | 0.02 | 0.76 | 0.75 |
| Low | High | |
| Unlevered beta | 0.49 | 0.54 |
| Relevered beta | 0.79 | 1.13 |
| Adjusted relevered beta | 0.86 | 1.09 |
TAM.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 TAM.L:
cost_of_equity (10.90%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.86) + 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.