LEE WACC - Weighted Average Cost of Capital
The WACC of Lee Enterprises Inc (LEE) is 9.4%.
| Range | Selected | |
| Cost of equity | 7.3% - 12.2% | 9.75% |
| Tax rate | 23.8% - 49.6% | 36.7% |
| Cost of debt | 8.8% - 23.9% | 16.35% |
| WACC | 6.7% - 12.0% | 9.4% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.76 | 1.31 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.3% | 12.2% |
| Tax rate | 23.8% | 49.6% |
| Debt/Equity ratio | 10.54 | 10.54 |
| Cost of debt | 8.8% | 23.9% |
| After-tax WACC | 6.7% | 12.0% |
| Selected WACC | 9.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| LEE | Lee Enterprises Inc | 10.54 | 0.94 | 0.1 |
| ACNI | American Community Newspapers Inc | 2.36 | 1.27 | 0.46 |
| CMLS | Cumulus Media Inc | 46.38 | 1.64 | 0.05 |
| DJCO | Daily Journal Corp | 0.05 | 0.94 | 0.91 |
| GVC.TO | Glacier Media Inc | 0.61 | 0.44 | 0.3 |
| LM.V | Lingo Media Corp | 0.03 | 1.41 | 1.38 |
| PNC.A.TO | Postmedia Network Canada Corp | 2.54 | 0.73 | 0.25 |
| UONEK | Urban One Inc | 15.44 | 1.11 | 0.09 |
| POL.OL | Polaris Media ASA | 0.21 | -0.29 | -0.25 |
| ROU.BR | Roularta Media Group NV | 0.04 | -0.24 | -0.23 |
| Low | High | |
| Unlevered beta | 0.1 | 0.27 |
| Relevered beta | 0.64 | 1.46 |
| Adjusted relevered beta | 0.76 | 1.31 |
LEE'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 LEE:
cost_of_equity (9.75%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.76) + 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.