VTU.L
Vertu Motors PLC
Price:  
61.9 
GBP
Volume:  
186,976
United Kingdom | Specialty Retail

VTU.L WACC - Weighted Average Cost of Capital

The WACC of Vertu Motors PLC (VTU.L) is 9.3%.

The Cost of Equity of Vertu Motors PLC (VTU.L) is 13.45%.
The Cost of Debt of Vertu Motors PLC (VTU.L) is 7.85%.

RangeSelected
Cost of equity11.5% - 15.4%13.45%
Tax rate24.9% - 26.1%25.5%
Cost of debt7.6% - 8.1%7.85%
WACC8.4% - 10.3%9.3%
WACC

VTU.L WACC calculation

CategoryLowHigh
Long-term bond rate4.0%4.5%
Equity market risk premium6.0%7.0%
Adjusted beta1.261.49
Additional risk adjustments0.0%0.5%
Cost of equity11.5%15.4%
Tax rate24.9%26.1%
Debt/Equity ratio
1.21.2
Cost of debt7.6%8.1%
After-tax WACC8.4%10.3%
Selected WACC9.3%

VTU.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 VTU.L:

cost_of_equity (13.45%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (1.26) + 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.