VTU.L
Vertu Motors PLC
Price:  
63.50 
GBP
Volume:  
298,312.00
United Kingdom | Specialty Retail
Valuation
Overview
Financials
Forecast
Compare
Historical Price
SolvencyDividends
Transactions
People

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%.

Range Selected
Cost of equity 11.50% - 15.40% 13.45%
Tax rate 24.90% - 26.10% 25.50%
Cost of debt 7.60% - 8.10% 7.85%
WACC 8.4% - 10.3% 9.3%
WACC

VTU.L WACC calculation

Category Low High
Long-term bond rate 4.0% 4.5%
Equity market risk premium 6.0% 7.0%
Adjusted beta 1.26 1.49
Additional risk adjustments 0.0% 0.5%
Cost of equity 11.50% 15.40%
Tax rate 24.90% 26.10%
Debt/Equity ratio 1.2 1.2
Cost of debt 7.60% 8.10%
After-tax WACC 8.4% 10.3%
Selected WACC 9.3%

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.