LHA.DE
Deutsche Lufthansa AG
Price:  
6.46 
EUR
Volume:  
5,801,147.00
Germany | Airlines
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LHA.DE WACC - Weighted Average Cost of Capital

The WACC of Deutsche Lufthansa AG (LHA.DE) is 6.1%.

The Cost of Equity of Deutsche Lufthansa AG (LHA.DE) is 9.55%.
The Cost of Debt of Deutsche Lufthansa AG (LHA.DE) is 5.20%.

Range Selected
Cost of equity 7.90% - 11.20% 9.55%
Tax rate 16.20% - 17.50% 16.85%
Cost of debt 4.00% - 6.40% 5.20%
WACC 4.9% - 7.4% 6.1%
WACC

LHA.DE WACC calculation

Category Low High
Long-term bond rate 2.8% 3.3%
Equity market risk premium 5.1% 6.1%
Adjusted beta 0.99 1.21
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.90% 11.20%
Tax rate 16.20% 17.50%
Debt/Equity ratio 1.84 1.84
Cost of debt 4.00% 6.40%
After-tax WACC 4.9% 7.4%
Selected WACC 6.1%

LHA.DE'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 LHA.DE:

cost_of_equity (9.55%) = risk_free_rate (3.05%) + equity_risk_premium (5.60%) * adjusted_beta (0.99) + 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.