The WACC of The Lexington Company AB (publ) (LEX.ST) is 6.9%.
Range | Selected | |
Cost of equity | 6.7% - 11.6% | 9.15% |
Tax rate | 3.2% - 8.8% | 6% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 5.8% - 8.1% | 6.9% |
Category | Low | High |
Long-term bond rate | 2.3% | 2.8% |
Equity market risk premium | 4.7% | 5.7% |
Adjusted beta | 0.92 | 1.45 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 6.7% | 11.6% |
Tax rate | 3.2% | 8.8% |
Debt/Equity ratio | 1 | 1 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 5.8% | 8.1% |
Selected WACC | 6.9% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
LEX.ST | The Lexington Company AB (publ) | 0.9 | 0.9 | 0.48 |
ATEKS.IS | Akin Tekstil AS | 0.12 | 1.44 | 1.29 |
BRMEN.IS | Birlik Mensucat Ticaret ve Sanayi Isletmesi AS | 0.01 | 1.05 | 1.04 |
EPIL.AT | Selected Textile Industries Association SA | 9.11 | 1.03 | 0.11 |
FIER.AT | Fieratex SA | 1.72 | 1.06 | 0.4 |
HATEK.IS | Hateks Hatay Tekstil Isletmeleri AS | 0.2 | 0.87 | 0.73 |
PTD.L | Pittards PLC | 13.89 | -0.54 | -0.04 |
ROYAL.IS | Royal Hali Iplik Tekstil Mobilya Sanayi ve Ticaret AS | 1.67 | 0.74 | 0.28 |
SKTAS.IS | Soktas Tekstil Sanayi ve Ticaret AS | 0.84 | 0.87 | 0.48 |
SNPAM.IS | Sonmez Pamuklu Sanayii AS | 0.05 | 1.3 | 1.24 |
YUNSA.IS | Yunsa Yunlu Sanayi ve Ticaret AS | 0.39 | 1.52 | 1.11 |
Low | High | |
Unlevered beta | 0.48 | 0.73 |
Relevered beta | 0.88 | 1.67 |
Adjusted relevered beta | 0.92 | 1.45 |
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 LEX.ST:
cost_of_equity (9.15%) = risk_free_rate (2.55%) + equity_risk_premium (5.20%) * adjusted_beta (0.92) + 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.