LFDE.PA WACC - Weighted Average Cost of Capital

The WACC of La Francaise de l Energie SA (LFDE.PA) is 7.2%.

The Cost of Equity of La Francaise de l Energie SA (LFDE.PA) is 7.75%.

The Cost of Debt of La Francaise de l Energie SA (LFDE.PA) is 6.25%.

	Range	Selected
Cost of equity	6.50% - 9.00%	7.75%
Tax rate	31.70% - 43.40%	37.55%
Cost of debt	4.00% - 8.50%	6.25%
WACC	6.0% - 8.4%	7.2%

WACC

LFDE.PA WACC calculation

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	6.50%	9.00%

Tax rate	31.70%	43.40%
Debt/Equity ratio	0.16	0.16
Cost of debt	4.00%	8.50%

After-tax WACC	6.0%	8.4%


Selected WACC	7.2%

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.