LESL
Leslie's Inc
Price:  
0.44 
USD
Volume:  
3,181,388.00
United States | Specialty Retail
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LESL WACC - Weighted Average Cost of Capital

The WACC of Leslie's Inc (LESL) is 9.7%.

The Cost of Equity of Leslie's Inc (LESL) is 10.95%.
The Cost of Debt of Leslie's Inc (LESL) is 12.60%.

Range Selected
Cost of equity 5.50% - 16.40% 10.95%
Tax rate 23.10% - 24.50% 23.80%
Cost of debt 9.60% - 15.60% 12.60%
WACC 7.2% - 12.3% 9.7%
WACC

LESL WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.36 2.07
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.50% 16.40%
Tax rate 23.10% 24.50%
Debt/Equity ratio 9.31 9.31
Cost of debt 9.60% 15.60%
After-tax WACC 7.2% 12.3%
Selected WACC 9.7%

LESL'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 LESL:

cost_of_equity (10.95%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.36) + 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.