LL
Lumber Liquidators Holdings Inc
Price:  
0.84 
USD
Volume:  
568,386.00
United States | Specialty Retail
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LL WACC - Weighted Average Cost of Capital

The WACC of Lumber Liquidators Holdings Inc (LL) is 6.0%.

The Cost of Equity of Lumber Liquidators Holdings Inc (LL) is 12,280.60%.
The Cost of Debt of Lumber Liquidators Holdings Inc (LL) is 5.00%.

Range Selected
Cost of equity 10,289.10% - 14,272.10% 12,280.60%
Tax rate 16.60% - 19.00% 17.80%
Cost of debt 5.00% - 5.00% 5.00%
WACC 5.7% - 6.2% 6.0%
WACC

LL WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 2235.92 2547.72
Additional risk adjustments 0.0% 0.5%
Cost of equity 10,289.10% 14,272.10%
Tax rate 16.60% 19.00%
Debt/Equity ratio 6600 6600
Cost of debt 5.00% 5.00%
After-tax WACC 5.7% 6.2%
Selected WACC 6.0%

LL'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 LL:

cost_of_equity (12,280.60%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (2235.92) + 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.