THRL.L WACC - Weighted Average Cost of Capital

The WACC of Target Healthcare REIT PLC (THRL.L) is 7.5%.

The Cost of Equity of Target Healthcare REIT PLC (THRL.L) is 8.60%.

The Cost of Debt of Target Healthcare REIT PLC (THRL.L) is 4.60%.

	Range	Selected
Cost of equity	7.60% - 9.60%	8.60%
Tax rate	-% - -%	-%
Cost of debt	4.00% - 5.20%	4.60%
WACC	6.6% - 8.3%	7.5%

WACC

THRL.L WACC calculation

Category	Low	High

Long-term bond rate	4.0%	4.5%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.6	0.66

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.60%	9.60%

Tax rate	-%	-%
Debt/Equity ratio	0.39	0.39
Cost of debt	4.00%	5.20%

After-tax WACC	6.6%	8.3%


Selected WACC	7.5%

THRL.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 THRL.L:

cost_of_equity (8.60%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.6) + 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.