LBI.V WACC - Weighted Average Cost of Capital
The WACC of Lions Bay Capital Inc (LBI.V) is 7.8%.
| Range | Selected | |
| Cost of equity | 6.2% - 10.1% | 8.15% |
| Tax rate | 11.3% - 16.3% | 13.8% |
| Cost of debt | 4.5% - 7.0% | 5.75% |
| WACC | 6.0% - 9.7% | 7.8% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.45 | 0.86 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.2% | 10.1% |
| Tax rate | 11.3% | 16.3% |
| Debt/Equity ratio | 0.1 | 0.1 |
| Cost of debt | 4.5% | 7.0% |
| After-tax WACC | 6.0% | 9.7% |
| Selected WACC | 7.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| LBI.V | Lions Bay Capital Inc | 0.1 | -1 | -0.92 |
| FPVD | Force Protection Video Equipment Corp | 0 | 0.95 | 0.95 |
| HIH.V | Hylands International Holdings Inc | 0.03 | 1.64 | 1.6 |
| IRNS | Ironstone Group Inc | 578.62 | -0.19 | 0 |
| LITT.V | Roadman Investments Corp | 0.06 | 0.61 | 0.58 |
| MILC | Millennium Investment & Acquisition Company Inc | 1.12 | 0.32 | 0.17 |
| MRBL.CN | Marble Financial Inc | 0.64 | -0.56 | -0.36 |
| PDV.TO | Prime Dividend Corp | 0 | 1.26 | 1.26 |
| PPK.V | Prospect Park Capital Corp | 0.02 | 2 | 1.97 |
| SRSG | Spirits Time International Inc | 1.56 | 0.49 | 0.21 |
| Low | High | |
| Unlevered beta | 0.19 | 0.73 |
| Relevered beta | 0.18 | 0.79 |
| Adjusted relevered beta | 0.45 | 0.86 |
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 (8.15%) = risk_free_rate (4.15%) + equity_risk_premium (5.60%) * adjusted_beta (0.45) + 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.