LBON.PA WACC - Weighted Average Cost of Capital

The WACC of Compagnie Lebon SA (LBON.PA) is 6.4%.

The Cost of Equity of Compagnie Lebon SA (LBON.PA) is 11.60%.

The Cost of Debt of Compagnie Lebon SA (LBON.PA) is 5.00%.

	Range	Selected
Cost of equity	9.10% - 14.10%	11.60%
Tax rate	25.80% - 37.80%	31.80%
Cost of debt	5.00% - 5.00%	5.00%
WACC	5.7% - 7.2%	6.4%

WACC

LBON.PA WACC calculation

Category	Low	High

Long-term bond rate	3.1%	3.6%
Equity market risk premium	6.2%	7.2%
Adjusted beta	0.96	1.39

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.10%	14.10%

Tax rate	25.80%	37.80%
Debt/Equity ratio	1.7	1.7
Cost of debt	5.00%	5.00%

After-tax WACC	5.7%	7.2%


Selected WACC	6.4%

LBON.PA'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 LBON.PA:

cost_of_equity (11.60%) = risk_free_rate (3.35%) + equity_risk_premium (6.70%) * adjusted_beta (0.96) + 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.