LCN.WA WACC - Weighted Average Cost of Capital

The WACC of Labocanna SA (LCN.WA) is 8.1%.

The Cost of Equity of Labocanna SA (LCN.WA) is 8.35%.

The Cost of Debt of Labocanna SA (LCN.WA) is 5.50%.

	Range	Selected
Cost of equity	7.50% - 9.20%	8.35%
Tax rate	17.00% - 48.00%	32.50%
Cost of debt	4.00% - 7.00%	5.50%
WACC	7.3% - 8.9%	8.1%

WACC

LCN.WA WACC calculation

Category	Low	High

Long-term bond rate	5.5%	6.0%
Equity market risk premium	6.3%	7.3%
Adjusted beta	0.32	0.37

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.50%	9.20%

Tax rate	17.00%	48.00%
Debt/Equity ratio	0.06	0.06
Cost of debt	4.00%	7.00%

After-tax WACC	7.3%	8.9%


Selected WACC	8.1%

LCN.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 LCN.WA:

cost_of_equity (8.35%) = risk_free_rate (5.75%) + equity_risk_premium (6.80%) * adjusted_beta (0.32) + 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.