LBI.V
Lions Bay Capital Inc
Price:  
0.03 
CAD
Volume:  
75,700.00
Australia | N/A
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LBI.V WACC - Weighted Average Cost of Capital

The WACC of Lions Bay Capital Inc (LBI.V) is 7.6%.

The Cost of Equity of Lions Bay Capital Inc (LBI.V) is 7.95%.
The Cost of Debt of Lions Bay Capital Inc (LBI.V) is 5.75%.

Range Selected
Cost of equity 5.80% - 10.10% 7.95%
Tax rate 11.30% - 16.30% 13.80%
Cost of debt 4.50% - 7.00% 5.75%
WACC 5.6% - 9.6% 7.6%
WACC

LBI.V WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 5.1% 6.1%
Adjusted beta 0.37 0.85
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.80% 10.10%
Tax rate 11.30% 16.30%
Debt/Equity ratio 0.13 0.13
Cost of debt 4.50% 7.00%
After-tax WACC 5.6% 9.6%
Selected WACC 7.6%

LBI.V'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 LBI.V:

cost_of_equity (7.95%) = risk_free_rate (4.15%) + equity_risk_premium (5.60%) * adjusted_beta (0.37) + 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.