LBK.MC WACC - Weighted Average Cost of Capital
The WACC of Liberbank SA (LBK.MC) is 5.0%.
| Range | Selected | |
| Cost of equity | 11.7% - 27.5% | 19.6% |
| Tax rate | 27.9% - 32.5% | 30.2% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 4.4% - 5.6% | 5.0% |
| Category | Low | High |
| Long-term bond rate | 2.8% | 3.3% |
| Equity market risk premium | 6.3% | 7.3% |
| Adjusted beta | 1.41 | 3.24 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 11.7% | 27.5% |
| Tax rate | 27.9% | 32.5% |
| Debt/Equity ratio | 9.62 | 9.62 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 4.4% | 5.6% |
| Selected WACC | 5.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| LBK.MC | Liberbank SA | 9.62 | 1.26 | 0.17 |
| ALR.WA | Alior Bank SA | 0.19 | 1.41 | 1.25 |
| BEKN.SW | Berner Kantonalbank AG | 4.5 | 0.13 | 0.03 |
| BPSO.MI | Banca Popolare di Sondrio ScpA | 2.14 | 1.39 | 0.57 |
| CE.MI | Credito Emiliano SpA | 2.82 | 0.94 | 0.32 |
| IL0A.IR | Permanent TSB Group Holdings PLC | 0.81 | 0.98 | 0.63 |
| NLB.L | Nova Ljubljanska Banka dd Ljubljana | 0.33 | 1.09 | 0.89 |
| SOR.OL | Sparebanken Sor | 9.05 | 0.59 | 0.08 |
| SVEG.OL | Sparebanken Vest | 11.36 | 0.71 | 0.08 |
| UNI.MC | Unicaja Banco SA | 0.78 | 1.25 | 0.81 |
| Low | High | |
| Unlevered beta | 0.26 | 0.59 |
| Relevered beta | 1.61 | 4.34 |
| Adjusted relevered beta | 1.41 | 3.24 |
LBK.MC'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 LBK.MC:
cost_of_equity (19.60%) = risk_free_rate (3.05%) + equity_risk_premium (6.80%) * adjusted_beta (1.41) + 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.