LPA.L WACC - Weighted Average Cost of Capital
The WACC of LPA Group PLC (LPA.L) is 7.6%.
| Range | Selected | |
| Cost of equity | 7.8% - 10.2% | 9% |
| Tax rate | 12.0% - 26.0% | 19% |
| Cost of debt | 4.7% - 7.0% | 5.85% |
| WACC | 6.7% - 8.6% | 7.6% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.64 | 0.74 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.8% | 10.2% |
| Tax rate | 12.0% | 26.0% |
| Debt/Equity ratio | 0.45 | 0.45 |
| Cost of debt | 4.7% | 7.0% |
| After-tax WACC | 6.7% | 8.6% |
| Selected WACC | 7.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| LPA.L | LPA Group PLC | 0.45 | -0.67 | -0.48 |
| ALCUR.PA | Arcure SA | 0.32 | 0.53 | 0.42 |
| ALMEC.PA | Mecelec Composites SA | 0.86 | 0.75 | 0.43 |
| ALUCI.PA | Lucibel SA | 0.96 | 1.45 | 0.79 |
| APE.WA | APS Energia SA | 0.26 | 0.21 | 0.17 |
| EMKEL.IS | EMEK Elektrik Endustrisi AS | 0.21 | 1.45 | 1.23 |
| ENEDO.HE | Enedo Oyj | 0.66 | 0.22 | 0.14 |
| GEREL.IS | Gersan Elektrik Ticaret ve Sanayi AS | 0.39 | 1.85 | 1.38 |
| LEN.WA | Lena Lighting SA | 0.27 | 0.23 | 0.18 |
| RDL.WA | Radpol SA | 0.27 | 0.57 | 0.46 |
| Low | High | |
| Unlevered beta | 0.32 | 0.44 |
| Relevered beta | 0.46 | 0.61 |
| Adjusted relevered beta | 0.64 | 0.74 |
LPA.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 LPA.L:
cost_of_equity (9.00%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.64) + 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.