LFDE.PA WACC - Weighted Average Cost of Capital
The WACC of La Francaise de l Energie SA (LFDE.PA) is 7.2%.
| Range | Selected | |
| Cost of equity | 6.5% - 9.0% | 7.75% |
| Tax rate | 31.7% - 43.4% | 37.55% |
| Cost of debt | 4.0% - 8.5% | 6.25% |
| WACC | 6.0% - 8.4% | 7.2% |
| Category | Low | High |
| Long-term bond rate | 2.6% | 3.1% |
| Equity market risk premium | 5.2% | 6.2% |
| Adjusted beta | 0.75 | 0.87 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.5% | 9.0% |
| Tax rate | 31.7% | 43.4% |
| Debt/Equity ratio | 0.16 | 0.16 |
| Cost of debt | 4.0% | 8.5% |
| After-tax WACC | 6.0% | 8.4% |
| Selected WACC | 7.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| LFDE.PA | La Francaise de l Energie SA | 0.16 | 0.93 | 0.83 |
| AEX.L | Aminex PLC | 1.07 | 0.87 | 0.5 |
| I3E.L | I3 Energy PLC | 0.23 | 0.23 | 0.2 |
| PANR.L | Pantheon Resources PLC | 0.03 | -0.12 | -0.12 |
| PMG.L | Parkmead Group PLC | 0.08 | 1.48 | 1.41 |
| SAVE.L | Savannah Energy PLC | 3.91 | 0.5 | 0.14 |
| SEY.L | Sterling Energy PLC | 0.02 | 0.3 | 0.29 |
| SLE.L | San Leon Energy PLC | 0.03 | 2.73 | 2.68 |
| WEN.L | Wentworth Resources PLC | 0 | -0.09 | -0.09 |
| ZOE.L | Zoetic International PLC | 0.01 | 0.55 | 0.54 |
| Low | High | |
| Unlevered beta | 0.25 | 0.52 |
| Relevered beta | 0.63 | 0.81 |
| Adjusted relevered beta | 0.75 | 0.87 |
LFDE.PA'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 LFDE.PA:
cost_of_equity (7.75%) = risk_free_rate (2.85%) + equity_risk_premium (5.70%) * adjusted_beta (0.75) + 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.