LKFN
Lakeland Financial Corp
Price:  
59.52 
USD
Volume:  
101,038.00
United States | Banks
Valuation
Overview
Financials
Forecast
Compare
Historical Price
SolvencyDividends
Transactions
People

LKFN WACC - Weighted Average Cost of Capital

The WACC of Lakeland Financial Corp (LKFN) is 7.7%.

The Cost of Equity of Lakeland Financial Corp (LKFN) is 11.20%.
The Cost of Debt of Lakeland Financial Corp (LKFN) is 5.00%.

Range Selected
Cost of equity 9.70% - 12.70% 11.20%
Tax rate 16.70% - 17.60% 17.15%
Cost of debt 5.00% - 5.00% 5.00%
WACC 6.9% - 8.4% 7.7%
WACC

LKFN WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.27 1.39
Additional risk adjustments 0.0% 0.5%
Cost of equity 9.70% 12.70%
Tax rate 16.70% 17.60%
Debt/Equity ratio 1 1
Cost of debt 5.00% 5.00%
After-tax WACC 6.9% 8.4%
Selected WACC 7.7%

LKFN'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 LKFN:

cost_of_equity (11.20%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.27) + 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.