LBY.V
Liberty One Lithium Corp
Price:  
0.40 
CAD
Volume:  
14,950.00
Canada | Metals & Mining
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LBY.V WACC - Weighted Average Cost of Capital

The WACC of Liberty One Lithium Corp (LBY.V) is 9.4%.

The Cost of Equity of Liberty One Lithium Corp (LBY.V) is 9.50%.
The Cost of Debt of Liberty One Lithium Corp (LBY.V) is 5.00%.

Range Selected
Cost of equity 8.10% - 10.90% 9.50%
Tax rate 27.00% - 27.00% 27.00%
Cost of debt 5.00% - 5.00% 5.00%
WACC 8.0% - 10.7% 9.4%
WACC

LBY.V WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 4.7% 5.7%
Adjusted beta 1.04 1.18
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.10% 10.90%
Tax rate 27.00% 27.00%
Debt/Equity ratio 0.03 0.03
Cost of debt 5.00% 5.00%
After-tax WACC 8.0% 10.7%
Selected WACC 9.4%

LBY.V'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 LBY.V:

cost_of_equity (9.50%) = risk_free_rate (3.45%) + equity_risk_premium (5.20%) * adjusted_beta (1.04) + 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.