Templeton Emerging Markets Investment Trust PLC (TEM.L) WACC Analysis

As of May 28, 2025, Templeton Emerging Markets Investment Trust PLC (TEM.L) carries a Weighted Average Cost of Capital (WACC) of 10.1%. WACC reflects the blended rate Templeton Emerging Markets Investment Trust PLC must pay to both equity and debt holders.

Within that, the cost of equity is 9.2%, the cost of debt is 4.0%, and the effective tax rate is 2.2%.

Breakdown of WACC Components

• Long-term bond rate: 4.0% – 4.5%
• Equity market risk premium: 6.0% – 7.0%
• Adjusted beta: 0.87 – 0.97
• Additional risk adjustment: 0.0% – 0.5%
• Debt-to-equity ratio: 0.06

What It Means for Investors

With a selected WACC of 10.1%, Templeton Emerging Markets Investment Trust PLC must ensure any new investment returns exceed this threshold to generate shareholder value. This level reflects a relatively high financing requirement.