LL
Lumber Liquidators Holdings Inc
Price:  
0.84 
USD
Volume:  
568,386
United States | Specialty Retail

LL WACC - Weighted Average Cost of Capital

The WACC of Lumber Liquidators Holdings Inc (LL) is 6.3%.

The Cost of Equity of Lumber Liquidators Holdings Inc (LL) is 14204.4%.
The Cost of Debt of Lumber Liquidators Holdings Inc (LL) is 5%.

RangeSelected
Cost of equity10034.5% - 18374.3%14204.4%
Tax rate16.6% - 19.0%17.8%
Cost of debt5.0% - 5.0%5%
WACC5.7% - 6.8%6.3%
WACC

LL WACC calculation

CategoryLowHigh
Long-term bond rate3.9%4.4%
Equity market risk premium4.6%5.6%
Adjusted beta2180.573280.26
Additional risk adjustments0.0%0.5%
Cost of equity10034.5%18374.3%
Tax rate16.6%19.0%
Debt/Equity ratio
66006600
Cost of debt5.0%5.0%
After-tax WACC5.7%6.8%
Selected WACC6.3%

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 (14,204.40%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (2180.57) + 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.