LIB.L WACC - Weighted Average Cost of Capital

The WACC of Libertine Holdings PLC (LIB.L) is 21.5%.

The Cost of Equity of Libertine Holdings PLC (LIB.L) is 22.95%.

The Cost of Debt of Libertine Holdings PLC (LIB.L) is 8.70%.

	Range	Selected
Cost of equity	21.00% - 24.90%	22.95%
Tax rate	11.60% - 15.70%	13.65%
Cost of debt	7.00% - 10.40%	8.70%
WACC	19.6% - 23.3%	21.5%

WACC

LIB.L WACC calculation

Category	Low	High

Long-term bond rate	4.0%	4.5%
Equity market risk premium	6.0%	7.0%
Adjusted beta	2.85	2.85

Additional risk adjustments	0.0%	0.5%
Cost of equity	21.00%	24.90%

Tax rate	11.60%	15.70%
Debt/Equity ratio	0.1	0.1
Cost of debt	7.00%	10.40%

After-tax WACC	19.6%	23.3%


Selected WACC	21.5%

LIB.L'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 LIB.L:

cost_of_equity (22.95%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (2.85) + 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.