LORL
Loral Space & Communications Inc
Price:  
41.52 
USD
Volume:  
603,597.00
United States | Media
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LORL WACC - Weighted Average Cost of Capital

The WACC of Loral Space & Communications Inc (LORL) is 6.1%.

The Cost of Equity of Loral Space & Communications Inc (LORL) is 8.50%.
The Cost of Debt of Loral Space & Communications Inc (LORL) is 5.00%.

Range Selected
Cost of equity 6.80% - 10.20% 8.50%
Tax rate 27.00% - 27.00% 27.00%
Cost of debt 5.00% - 5.00% 5.00%
WACC 5.2% - 6.9% 6.1%
WACC

LORL WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 4.2% 5.2%
Adjusted beta 0.87 1.15
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.80% 10.20%
Tax rate 27.00% 27.00%
Debt/Equity ratio 1 1
Cost of debt 5.00% 5.00%
After-tax WACC 5.2% 6.9%
Selected WACC 6.1%

LORL'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 LORL:

cost_of_equity (8.50%) = risk_free_rate (3.45%) + equity_risk_premium (4.70%) * adjusted_beta (0.87) + 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.