LEAT
Leatt Corp
Price:  
7.98 
USD
Volume:  
5,020.00
South Africa | Leisure Products
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LEAT WACC - Weighted Average Cost of Capital

The WACC of Leatt Corp (LEAT) is 8.0%.

The Cost of Equity of Leatt Corp (LEAT) is 8.05%.
The Cost of Debt of Leatt Corp (LEAT) is 6.05%.

Range Selected
Cost of equity 7.00% - 9.10% 8.05%
Tax rate 24.00% - 25.30% 24.65%
Cost of debt 5.10% - 7.00% 6.05%
WACC 6.9% - 9.1% 8.0%
WACC

LEAT WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.67 0.76
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.00% 9.10%
Tax rate 24.00% 25.30%
Debt/Equity ratio 0.02 0.02
Cost of debt 5.10% 7.00%
After-tax WACC 6.9% 9.1%
Selected WACC 8.0%

LEAT'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 LEAT:

cost_of_equity (8.05%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.67) + 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.