LMPX WACC - Weighted Average Cost of Capital
The WACC of Lmp Automotive Holdings Inc (LMPX) is 6.6%.
| Range | Selected | |
| Cost of equity | 9.5% - 12.3% | 10.9% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 5.8% - 9.1% | 7.45% |
| WACC | 5.4% - 7.8% | 6.6% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 1.22 | 1.33 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.5% | 12.3% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 3.96 | 3.96 |
| Cost of debt | 5.8% | 9.1% |
| After-tax WACC | 5.4% | 7.8% |
| Selected WACC | 6.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| LMPX | Lmp Automotive Holdings Inc | 3.96 | 1.69 | 0.44 |
| ACQ.TO | AutoCanada Inc | 4.18 | 1.28 | 0.32 |
| BLNK | Blink Charging Co | 0.01 | 1.15 | 1.15 |
| CALI | China Auto Logistics Inc | 3.65 | 0.91 | 0.25 |
| CRMT | America's CAR-MART Inc | 1.77 | 0.98 | 0.43 |
| DIV.TO | Diversified Royalty Corp | 0.52 | 0.56 | 0.41 |
| KXIN | Kaixin Auto Holdings | 0.89 | 0.09 | 0.06 |
| LAZY | Lazydays Holdings Inc | 4.84 | 1.63 | 0.36 |
| LOTZ | Carlotz Inc | 2.29 | 0.65 | 0.25 |
| MNRO | Monro Inc | 0.96 | 0.63 | 0.37 |
| Low | High | |
| Unlevered beta | 0.34 | 0.38 |
| Relevered beta | 1.33 | 1.49 |
| Adjusted relevered beta | 1.22 | 1.33 |
LMPX'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 LMPX:
cost_of_equity (10.90%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.22) + 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.