LDC.BK WACC - Weighted Average Cost of Capital

The WACC of LDC Dental PCL (LDC.BK) is 9.0%.

The Cost of Equity of LDC Dental PCL (LDC.BK) is 9.45%.

The Cost of Debt of LDC Dental PCL (LDC.BK) is 10.60%.

	Range	Selected
Cost of equity	7.90% - 11.00%	9.45%
Tax rate	16.30% - 19.50%	17.90%
Cost of debt	6.90% - 14.30%	10.60%
WACC	6.8% - 11.3%	9.0%

WACC

LDC.BK WACC calculation

Category	Low	High

Long-term bond rate	2.6%	3.1%
Equity market risk premium	7.4%	8.4%
Adjusted beta	0.72	0.88

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.90%	11.00%

Tax rate	16.30%	19.50%
Debt/Equity ratio	1.11	1.11
Cost of debt	6.90%	14.30%

After-tax WACC	6.8%	11.3%


Selected WACC	9.0%

LDC.BK'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 LDC.BK:

cost_of_equity (9.45%) = risk_free_rate (2.85%) + equity_risk_premium (7.90%) * adjusted_beta (0.72) + 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.