AEP.L WACC - Weighted Average Cost of Capital

The WACC of Anglo-Eastern Plantations PLC (AEP.L) is 8.1%.

The Cost of Equity of Anglo-Eastern Plantations PLC (AEP.L) is 8.10%.

The Cost of Debt of Anglo-Eastern Plantations PLC (AEP.L) is 9.60%.

	Range	Selected
Cost of equity	6.80% - 9.40%	8.10%
Tax rate	21.50% - 24.40%	22.95%
Cost of debt	4.60% - 14.60%	9.60%
WACC	6.8% - 9.4%	8.1%

WACC

AEP.L WACC calculation

Category	Low	High

Long-term bond rate	4.0%	4.5%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.47	0.63

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.80%	9.40%

Tax rate	21.50%	24.40%
Debt/Equity ratio	0	0
Cost of debt	4.60%	14.60%

After-tax WACC	6.8%	9.4%


Selected WACC	8.1%

AEP.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 AEP.L:

cost_of_equity (8.10%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.47) + 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.