CIP Merchant Capital Ltd (CIP.L) WACC Analysis

As of May 24, 2025, CIP Merchant Capital Ltd (CIP.L) carries a Weighted Average Cost of Capital (WACC) of 6.9%. WACC reflects the blended rate CIP Merchant Capital Ltd must pay to both equity and debt holders.

Within that, the cost of equity is 7.7%, the cost of debt is 5.0%, and the effective tax rate is 19.0%.

Breakdown of WACC Components

• Long-term bond rate: 2.9% – 3.4%
• Equity market risk premium: 5.3% – 6.3%
• Adjusted beta: 0.89 – 1.25
• Additional risk adjustment: 0.0% – 0.5%
• Debt-to-equity ratio: 1

What It Means for Investors

With a selected WACC of 6.9%, CIP Merchant Capital Ltd must ensure any new investment returns exceed this threshold to generate shareholder value. This level reflects an attractive low cost of capital.