LMS.L WACC - Weighted Average Cost of Capital
The WACC of LMS Capital PLC (LMS.L) is 7.9%.
| Range | Selected | |
| Cost of equity | 6.9% - 8.9% | 7.9% |
| Tax rate | 19.0% - 19.0% | 19% |
| Cost of debt | 7.0% - 7.2% | 7.1% |
| WACC | 6.9% - 8.9% | 7.9% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.49 | 0.56 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.9% | 8.9% |
| Tax rate | 19.0% | 19.0% |
| Debt/Equity ratio | 0 | 0 |
| Cost of debt | 7.0% | 7.2% |
| After-tax WACC | 6.9% | 8.9% |
| Selected WACC | 7.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| LMS.L | LMS Capital PLC | 0 | 0.76 | 0.76 |
| ADV.WA | Adiuvo Investments SA | 1.37 | -0.66 | -0.31 |
| AKKO.BD | AKKO Invest Nyrt | 0.04 | 0.87 | 0.84 |
| ALTUR.PA | Altur Investissement SCA | 0 | 0.43 | 0.43 |
| BLU.WA | Blumerang Investors SA | 0.81 | -1.49 | -0.9 |
| BRSD.L | Brandshield Systems PLC | 0.23 | -0.8 | -0.67 |
| CLP.L | Clear Leisure PLC | 0.33 | 1.97 | 1.55 |
| DM.MI | Digital Magics SpA | 0.14 | 0.2 | 0.18 |
| FIC.MI | First Capital SpA | 0.49 | 0.4 | 0.29 |
| PIRI.L | Pires Investments PLC | 0.72 | 0.51 | 0.32 |
| Low | High | |
| Unlevered beta | 0.24 | 0.36 |
| Relevered beta | 0.24 | 0.34 |
| Adjusted relevered beta | 0.49 | 0.56 |
LMS.L'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 LMS.L:
cost_of_equity (7.90%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.49) + 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.