LLIT
Lianluo Smart Ltd
Price:  
7.15 
USD
Volume:  
1,049,170.00
China | Health Care Equipment & Supplies
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LLIT WACC - Weighted Average Cost of Capital

The WACC of Lianluo Smart Ltd (LLIT) is 6.4%.

The Cost of Equity of Lianluo Smart Ltd (LLIT) is 6.55%.
The Cost of Debt of Lianluo Smart Ltd (LLIT) is 5.00%.

Range Selected
Cost of equity 5.20% - 7.90% 6.55%
Tax rate 27.00% - 27.00% 27.00%
Cost of debt 5.00% - 5.00% 5.00%
WACC 5.1% - 7.7% 6.4%
WACC

LLIT WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 4.2% 5.2%
Adjusted beta 0.13 0.43
Additional risk adjustments 1.5% 2.0%
Cost of equity 5.20% 7.90%
Tax rate 27.00% 27.00%
Debt/Equity ratio 0.05 0.05
Cost of debt 5.00% 5.00%
After-tax WACC 5.1% 7.7%
Selected WACC 6.4%

LLIT'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 LLIT:

cost_of_equity (6.55%) = risk_free_rate (3.45%) + equity_risk_premium (4.70%) * adjusted_beta (0.13) + risk_adjustments (1.75%)

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