City Merchants High Yield Trust Ltd (CMHY.L) WACC Analysis

As of May 24, 2025, City Merchants High Yield Trust Ltd (CMHY.L) carries a Weighted Average Cost of Capital (WACC) of 7.9%. WACC reflects the blended rate City Merchants High Yield Trust Ltd must pay to both equity and debt holders.

Within that, the cost of equity is 6.7%, the cost of debt is 5.0%, and the effective tax rate is 0.1%.

Breakdown of WACC Components

• Long-term bond rate: 2.9% – 3.4%
• Equity market risk premium: 5.3% – 6.3%
• Adjusted beta: 0.71 – 0.89
• Additional risk adjustment: 0.0% – 0.5%
• Debt-to-equity ratio: 0.07

What It Means for Investors

With a selected WACC of 7.9%, City Merchants High Yield Trust Ltd must ensure any new investment returns exceed this threshold to generate shareholder value. This level reflects an attractive low cost of capital.