LIC.AX WACC - Weighted Average Cost of Capital
The WACC of Lifestyle Communities Ltd (LIC.AX) is 6.7%.
| Range | Selected | |
| Cost of equity | 6.3% - 9.2% | 7.75% |
| Tax rate | 30.1% - 30.1% | 30.1% |
| Cost of debt | 4.0% - 7.0% | 5.5% |
| WACC | 5.3% - 8.0% | 6.7% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.45 | 0.68 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.3% | 9.2% |
| Tax rate | 30.1% | 30.1% |
| Debt/Equity ratio | 0.38 | 0.38 |
| Cost of debt | 4.0% | 7.0% |
| After-tax WACC | 5.3% | 8.0% |
| Selected WACC | 6.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| LIC.AX | Lifestyle Communities Ltd | 0.38 | 0.98 | 0.77 |
| 1224.HK | C C Land Holdings Ltd | 2.22 | 0.34 | 0.13 |
| ADN.SI | First Sponsor Group Ltd | 1.14 | 0.11 | 0.06 |
| AVJ.AX | Avjennings Ltd | 0.61 | 0.57 | 0.4 |
| CWP.AX | Cedar Woods Properties Ltd | 0.24 | 0.87 | 0.75 |
| DVN.AX | Devine Ltd | 0.99 | 0.75 | 0.44 |
| FRI.AX | Finbar Group Ltd | 1.97 | 0.33 | 0.14 |
| MPX.AX | Mustera Property Group Ltd | 0.93 | -0.02 | -0.01 |
| PPC.AX | Peet Ltd | 0.45 | 0.84 | 0.64 |
| TIA.AX | Tian AN Australia Ltd | 17.71 | 0.1 | 0.01 |
| Low | High | |
| Unlevered beta | 0.14 | 0.42 |
| Relevered beta | 0.18 | 0.52 |
| Adjusted relevered beta | 0.45 | 0.68 |
LIC.AX'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 LIC.AX:
cost_of_equity (7.75%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (0.45) + 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.