LCT.AX WACC - Weighted Average Cost of Capital
The WACC of Living Cell Technologies Ltd (LCT.AX) is 6.1%.
| Range | Selected | |
| Cost of equity | 5.3% - 10.9% | 8.1% |
| Tax rate | 14.0% - 18.7% | 16.35% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 4.8% - 7.5% | 6.1% |
| Category | Low | High |
| Long-term bond rate | 4.1% | 4.6% |
| Equity market risk premium | 5.5% | 6.5% |
| Adjusted beta | -0.06 | 0.65 |
| Additional risk adjustments | 1.5% | 2.0% |
| Cost of equity | 5.3% | 10.9% |
| Tax rate | 14.0% | 18.7% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 4.8% | 7.5% |
| Selected WACC | 6.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| LCT.AX | Living Cell Technologies Ltd | 1.18 | -0.72 | -0.36 |
| ACW.AX | Actinogen Medical Ltd | 0 | -0.8 | -0.8 |
| ATX.AX | Amplia Therapeutics Ltd | 0 | -0.19 | -0.19 |
| BIT.AX | Biotron Ltd | 0 | 2.31 | 2.3 |
| CUV.AX | Clinuvel Pharmaceuticals Ltd | 0 | 0.96 | 0.95 |
| DXB.AX | Dimerix Ltd | 0 | 2.94 | 2.94 |
| KZA.AX | Kazia Therapeutics Ltd | 0.1 | -1.19 | -1.1 |
| PYC.AX | PYC Therapeutics Ltd | 0 | 2 | 2 |
| SCU.AX | Stemcell United Ltd | 0.19 | -0.63 | -0.54 |
| TLX.AX | Telix Pharmaceuticals Ltd | 0.07 | 1.5 | 1.42 |
| VBS.AX | Vectus Biosystems Ltd | 0.01 | 0.05 | 0.05 |
| Low | High | |
| Unlevered beta | -0.19 | 0.95 |
| Relevered beta | -0.58 | 0.48 |
| Adjusted relevered beta | -0.06 | 0.65 |
LCT.AX'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 LCT.AX:
cost_of_equity (8.10%) = risk_free_rate (4.35%) + equity_risk_premium (6.00%) * adjusted_beta (-0.06) + risk_adjustments (1.75%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.