LIFS.L WACC - Weighted Average Cost of Capital

The WACC of LifeSafe Holdings PLC (LIFS.L) is 16.6%.

The Cost of Equity of LifeSafe Holdings PLC (LIFS.L) is 12.85%.

The Cost of Debt of LifeSafe Holdings PLC (LIFS.L) is 49.70%.

	Range	Selected
Cost of equity	11.70% - 14.00%	12.85%
Tax rate	2.90% - 4.60%	3.75%
Cost of debt	7.00% - 92.40%	49.70%
WACC	11.2% - 21.9%	16.6%

WACC

LIFS.L WACC calculation

Category	Low	High

Long-term bond rate	4.0%	4.5%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.3	1.3

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.70%	14.00%

Tax rate	2.90%	4.60%
Debt/Equity ratio	0.12	0.12
Cost of debt	7.00%	92.40%

After-tax WACC	11.2%	21.9%


Selected WACC	16.6%

LIFS.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 LIFS.L:

cost_of_equity (12.85%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (1.3) + 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.