LEN.WA WACC - Weighted Average Cost of Capital

The WACC of Lena Lighting SA (LEN.WA) is 12.2%.

The Cost of Equity of Lena Lighting SA (LEN.WA) is 10.05%.

The Cost of Debt of Lena Lighting SA (LEN.WA) is 25.70%.

	Range	Selected
Cost of equity	8.50% - 11.60%	10.05%
Tax rate	20.60% - 21.40%	21.00%
Cost of debt	6.10% - 45.30%	25.70%
WACC	7.7% - 16.6%	12.2%

WACC

LEN.WA WACC calculation

Category	Low	High

Long-term bond rate	5.5%	6.0%
Equity market risk premium	6.3%	7.3%
Adjusted beta	0.47	0.7

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.50%	11.60%

Tax rate	20.60%	21.40%
Debt/Equity ratio	0.26	0.26
Cost of debt	6.10%	45.30%

After-tax WACC	7.7%	16.6%


Selected WACC	12.2%

LEN.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 LEN.WA:

cost_of_equity (10.05%) = risk_free_rate (5.75%) + equity_risk_premium (6.80%) * adjusted_beta (0.47) + 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.