LIFT.CN WACC - Weighted Average Cost of Capital

The WACC of Li-FT Power Ltd (LIFT.CN) is 11.0%.

The Cost of Equity of Li-FT Power Ltd (LIFT.CN) is 18.40%.

The Cost of Debt of Li-FT Power Ltd (LIFT.CN) is 5.00%.

	Range	Selected
Cost of equity	16.70% - 20.10%	18.40%
Tax rate	25.90% - 26.50%	26.20%
Cost of debt	5.00% - 5.00%	5.00%
WACC	10.2% - 11.9%	11.0%

WACC

LIFT.CN WACC calculation

Category	Low	High

Long-term bond rate	3.6%	4.1%
Equity market risk premium	5.5%	6.5%
Adjusted beta	2.39	2.39

Additional risk adjustments	0.0%	0.5%
Cost of equity	16.70%	20.10%

Tax rate	25.90%	26.50%
Debt/Equity ratio	1	1
Cost of debt	5.00%	5.00%

After-tax WACC	10.2%	11.9%


Selected WACC	11.0%

LIFT.CN'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 LIFT.CN:

cost_of_equity (18.40%) = risk_free_rate (3.85%) + equity_risk_premium (6.00%) * adjusted_beta (2.39) + 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.