TAVI.L WACC - Weighted Average Cost of Capital
The WACC of Tavistock Investments PLC (TAVI.L) is 8.5%.
| Range | Selected | |
| Cost of equity | 7.9% - 10.5% | 9.2% |
| Tax rate | 3.8% - 7.2% | 5.5% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 7.4% - 9.6% | 8.5% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.66 | 0.78 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.9% | 10.5% |
| Tax rate | 3.8% | 7.2% |
| Debt/Equity ratio | 0.18 | 0.18 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 7.4% | 9.6% |
| Selected WACC | 8.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| TAVI.L | Tavistock Investments PLC | 0.18 | 0.44 | 0.37 |
| ALI.WA | Altus Towarzystwo Funduszy Inwestycyjnych SA | 0.03 | 0.34 | 0.33 |
| COP.MI | Copernico SIM SpA | 0.02 | 0.57 | 0.55 |
| DZGYO.IS | Deniz Gayrimenkul Yatirim Ortakligi AS | 0.16 | 0.98 | 0.86 |
| EAB.HE | EAB Group Oyj | 0.17 | 0.71 | 0.61 |
| ESO.L | EPE Special Opportunities Ltd | 0.23 | 1.38 | 1.13 |
| HDFGS.IS | Hedef Girisim Sermayesi Yatirim Ortakligi AS | 0 | 0.96 | 0.96 |
| SHG.WA | Starhedge SA | 0.32 | 0.58 | 0.45 |
| SKH.WA | Skarbiec Holding SA | 0.01 | 0.3 | 0.3 |
| STM.L | STM Group PLC | 0.16 | -0.46 | -0.4 |
| Low | High | |
| Unlevered beta | 0.42 | 0.58 |
| Relevered beta | 0.49 | 0.67 |
| Adjusted relevered beta | 0.66 | 0.78 |
TAVI.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 TAVI.L:
cost_of_equity (9.20%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.66) + 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.