BMO Commercial Property Trust Ltd (BCPT.L) WACC Analysis

As of May 31, 2025, BMO Commercial Property Trust Ltd (BCPT.L) carries a Weighted Average Cost of Capital (WACC) of 8.6%. WACC reflects the blended rate BMO Commercial Property Trust Ltd must pay to both equity and debt holders.

Within that, the cost of equity is 9.1%, the cost of debt is 4.0%, and the effective tax rate is 0.7%.

Breakdown of WACC Components

• Long-term bond rate: 4.0% – 4.5%
• Equity market risk premium: 6.0% – 7.0%
• Adjusted beta: 0.85 – 0.91
• Additional risk adjustment: 0.0% – 0.5%
• Debt-to-equity ratio: 0.43

What It Means for Investors

With a selected WACC of 8.6%, BMO Commercial Property Trust Ltd must ensure any new investment returns exceed this threshold to generate shareholder value. This level reflects a moderate financing cost structure.