LKAI
LKA Gold Inc
Price:  
USD
Volume:  
70
United States | Metals & Mining

LKAI WACC - Weighted Average Cost of Capital

The WACC of LKA Gold Inc (LKAI) is 4.4%.

The Cost of Equity of LKA Gold Inc (LKAI) is 45.3%.
The Cost of Debt of LKA Gold Inc (LKAI) is 5%.

RangeSelected
Cost of equity3.2% - 87.4%45.3%
Tax rate26.2% - 27.0%26.6%
Cost of debt5.0% - 5.0%5%
WACC3.7% - 5.1%4.4%
WACC

LKAI WACC calculation

CategoryLowHigh
Long-term bond rate3.9%4.4%
Equity market risk premium4.6%5.6%
Adjusted beta-9.497.06
Additional risk adjustments43.0%43.5%
Cost of equity3.2%87.4%
Tax rate26.2%27.0%
Debt/Equity ratio
54.8754.87
Cost of debt5.0%5.0%
After-tax WACC3.7%5.1%
Selected WACC4.4%

LKAI'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 LKAI:

cost_of_equity (45.30%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (-9.49) + risk_adjustments (43.25%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.