LBRDA
Liberty Broadband Corp
Price:  
90.40 
USD
Volume:  
139,907.00
United States | Media
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LBRDA WACC - Weighted Average Cost of Capital

The WACC of Liberty Broadband Corp (LBRDA) is 7.3%.

The Cost of Equity of Liberty Broadband Corp (LBRDA) is 6.50%.
The Cost of Debt of Liberty Broadband Corp (LBRDA) is 12.45%.

Range Selected
Cost of equity 5.60% - 7.40% 6.50%
Tax rate 19.00% - 20.80% 19.90%
Cost of debt 4.00% - 20.90% 12.45%
WACC 5.0% - 9.6% 7.3%
WACC

LBRDA WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.37 0.44
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.60% 7.40%
Tax rate 19.00% 20.80%
Debt/Equity ratio 0.32 0.32
Cost of debt 4.00% 20.90%
After-tax WACC 5.0% 9.6%
Selected WACC 7.3%

LBRDA'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 LBRDA:

cost_of_equity (6.50%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * 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.