LBRT
Liberty Oilfield Services Inc
Price:  
11.91 
USD
Volume:  
2,652,545.00
United States | Energy Equipment & Services
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LBRT WACC - Weighted Average Cost of Capital

The WACC of Liberty Oilfield Services Inc (LBRT) is 9.8%.

The Cost of Equity of Liberty Oilfield Services Inc (LBRT) is 10.50%.
The Cost of Debt of Liberty Oilfield Services Inc (LBRT) is 8.10%.

Range Selected
Cost of equity 9.00% - 12.00% 10.50%
Tax rate 11.80% - 18.30% 15.05%
Cost of debt 4.80% - 11.40% 8.10%
WACC 8.1% - 11.5% 9.8%
WACC

LBRT WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.11 1.27
Additional risk adjustments 0.0% 0.5%
Cost of equity 9.00% 12.00%
Tax rate 11.80% 18.30%
Debt/Equity ratio 0.23 0.23
Cost of debt 4.80% 11.40%
After-tax WACC 8.1% 11.5%
Selected WACC 9.8%

LBRT'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 LBRT:

cost_of_equity (10.50%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.11) + 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.