LCID WACC - Weighted Average Cost of Capital
The WACC of Lucid Group Inc (LCID) is 8.5%.
| Range | Selected | |
| Cost of equity | 7.0% - 11.1% | 9.05% |
| Tax rate | 0.0% - 0.0% | 0% |
| Cost of debt | 6.1% - 7.0% | 6.55% |
| WACC | 6.8% - 10.1% | 8.5% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.69 | 1.11 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.0% | 11.1% |
| Tax rate | 0.0% | 0.0% |
| Debt/Equity ratio | 0.32 | 0.32 |
| Cost of debt | 6.1% | 7.0% |
| After-tax WACC | 6.8% | 10.1% |
| Selected WACC | 8.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| LCID | Lucid Group Inc | 0.32 | 1.29 | 0.98 |
| F | Ford Motor Co | 3.57 | 0.33 | 0.07 |
| FSR | Fisker Inc | 9.59 | 0.95 | 0.09 |
| GM | General Motors Co | 2.54 | 0.81 | 0.23 |
| THO | Thor Industries Inc | 0.25 | 1.09 | 0.87 |
| TSLA | Tesla Inc | 0.01 | 1.75 | 1.74 |
| WGO | Winnebago Industries Inc | 0.85 | 0.83 | 0.45 |
| WKHS | Workhorse Group Inc | 0.26 | 1.24 | 0.98 |
| Low | High | |
| Unlevered beta | 0.4 | 0.89 |
| Relevered beta | 0.54 | 1.16 |
| Adjusted relevered beta | 0.69 | 1.11 |
LCID'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 LCID:
cost_of_equity (9.05%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.69) + 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.