LBW.WA WACC - Weighted Average Cost of Capital

The WACC of Lubawa SA (LBW.WA) is 11.7%.

The Cost of Equity of Lubawa SA (LBW.WA) is 11.75%.

The Cost of Debt of Lubawa SA (LBW.WA) is 6.10%.

	Range	Selected
Cost of equity	10.50% - 13.00%	11.75%
Tax rate	18.20% - 18.60%	18.40%
Cost of debt	6.10% - 6.10%	6.10%
WACC	10.5% - 12.9%	11.7%

WACC

LBW.WA WACC calculation

Category	Low	High

Long-term bond rate	5.5%	6.0%
Equity market risk premium	6.3%	7.3%
Adjusted beta	0.79	0.89

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.50%	13.00%

Tax rate	18.20%	18.60%
Debt/Equity ratio	0.01	0.01
Cost of debt	6.10%	6.10%

After-tax WACC	10.5%	12.9%


Selected WACC	11.7%

LBW.WA'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 LBW.WA:

cost_of_equity (11.75%) = risk_free_rate (5.75%) + equity_risk_premium (6.80%) * adjusted_beta (0.79) + 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.