LBTI WACC - Weighted Average Cost of Capital
The WACC of Lithium & Boron Technology Inc (LBTI) is 5.3%.
| Range | Selected | |
| Cost of equity | 5.3% - 8.1% | 6.7% |
| Tax rate | 10.8% - 34.2% | 22.5% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 4.9% - 5.7% | 5.3% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.31 | 0.58 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.3% | 8.1% |
| Tax rate | 10.8% | 34.2% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 4.9% | 5.7% |
| Selected WACC | 5.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| LBTI | Lithium & Boron Technology Inc | 0.98 | -109.15 | -59.64 |
| ADMT | ADM Tronics Unlimited Inc | 0.11 | -0.33 | -0.31 |
| CHCC | China Chemical Corp | 2.04 | 0.26 | 0.1 |
| GDNP.V | Good Natured Products Inc | 34.63 | -1.11 | -0.04 |
| GLGI | Greystone Logistics Inc | 0.4 | 0.13 | 0.09 |
| GRA.V | NanoXplore Inc | 0.08 | 1.15 | 1.07 |
| GURE | Gulf Resources Inc | 0.18 | -0.65 | -0.56 |
| KBLB | Kraig Biocraft Laboratories Inc | 0.02 | 0.38 | 0.37 |
| LOOP | Loop Industries Inc | 0.07 | 1.03 | 0.97 |
| PRH.V | Pearl River Holdings Ltd | 1.94 | -0.46 | -0.18 |
| TANH | Tantech Holdings Ltd | 2.99 | 1.93 | 0.55 |
| Low | High | |
| Unlevered beta | -0.04 | 0.1 |
| Relevered beta | -0.03 | 0.37 |
| Adjusted relevered beta | 0.31 | 0.58 |
LBTI'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 LBTI:
cost_of_equity (6.70%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.31) + 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.