LAZ
Lazard Ltd
Price:  
43.00 
USD
Volume:  
1,483,271.00
Bermuda | Capital Markets
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Lazard WACC - Weighted Average Cost of Capital

The WACC of Lazard Ltd (LAZ) is 7.6%.

The Cost of Equity of Lazard Ltd (LAZ) is 9.90%.
The Cost of Debt of Lazard Ltd (LAZ) is 4.65%.

Range Selected
Cost of equity 7.90% - 11.90% 9.90%
Tax rate 24.70% - 25.40% 25.05%
Cost of debt 4.00% - 5.30% 4.65%
WACC 6.2% - 9.0% 7.6%
WACC

Lazard WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.88 1.25
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.90% 11.90%
Tax rate 24.70% 25.40%
Debt/Equity ratio 0.56 0.56
Cost of debt 4.00% 5.30%
After-tax WACC 6.2% 9.0%
Selected WACC 7.6%

Lazard'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 Lazard:

cost_of_equity (9.90%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.88) + 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.