LITB
LightInTheBox Holding Co Ltd
Price:  
1.26 
USD
Volume:  
4,374.00
China | Internet & Direct Marketing Retail
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LITB WACC - Weighted Average Cost of Capital

The WACC of LightInTheBox Holding Co Ltd (LITB) is 7.1%.

The Cost of Equity of LightInTheBox Holding Co Ltd (LITB) is 8.45%.
The Cost of Debt of LightInTheBox Holding Co Ltd (LITB) is 6.80%.

Range Selected
Cost of equity 7.40% - 9.50% 8.45%
Tax rate 15.40% - 19.10% 17.25%
Cost of debt 6.60% - 7.00% 6.80%
WACC 6.5% - 7.6% 7.1%
WACC

LITB WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.78 0.84
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.40% 9.50%
Tax rate 15.40% 19.10%
Debt/Equity ratio 1 1
Cost of debt 6.60% 7.00%
After-tax WACC 6.5% 7.6%
Selected WACC 7.1%

LITB'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 LITB:

cost_of_equity (8.45%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.78) + 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.