VEN2.L
Ventus 2 VCT PLC
Price:  
42.00 
GBP
Volume:  
616.00
United Kingdom | N/A
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VEN2.L WACC - Weighted Average Cost of Capital

The WACC of Ventus 2 VCT PLC (VEN2.L) is 7.5%.

The Cost of Equity of Ventus 2 VCT PLC (VEN2.L) is 10.95%.
The Cost of Debt of Ventus 2 VCT PLC (VEN2.L) is 5.00%.

Range Selected
Cost of equity 9.20% - 12.70% 10.95%
Tax rate 19.00% - 19.00% 19.00%
Cost of debt 5.00% - 5.00% 5.00%
WACC 6.6% - 8.4% 7.5%
WACC

VEN2.L WACC calculation

Category Low High
Long-term bond rate 2.9% 3.4%
Equity market risk premium 5.3% 6.3%
Adjusted beta 1.18 1.38
Additional risk adjustments 0.0% 0.5%
Cost of equity 9.20% 12.70%
Tax rate 19.00% 19.00%
Debt/Equity ratio 1 1
Cost of debt 5.00% 5.00%
After-tax WACC 6.6% 8.4%
Selected WACC 7.5%

VEN2.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 VEN2.L:

cost_of_equity (10.95%) = risk_free_rate (3.15%) + equity_risk_premium (5.80%) * adjusted_beta (1.18) + 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.