LITB
LightInTheBox Holding Co Ltd
Price:  
1.26 
USD
Volume:  
12,001.00
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 7.3%.

The Cost of Equity of LightInTheBox Holding Co Ltd (LITB) is 7.40%.
The Cost of Debt of LightInTheBox Holding Co Ltd (LITB) is 4.25%.

Range Selected
Cost of equity 6.50% - 8.30% 7.40%
Tax rate 11.60% - 19.10% 15.35%
Cost of debt 4.00% - 4.50% 4.25%
WACC 6.4% - 8.2% 7.3%
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 0.58 0.61
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.50% 8.30%
Tax rate 11.60% 19.10%
Debt/Equity ratio 0.03 0.03
Cost of debt 4.00% 4.50%
After-tax WACC 6.4% 8.2%
Selected WACC 7.3%

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 (7.40%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.58) + 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.