LPP.WA WACC - Weighted Average Cost of Capital

The WACC of LPP SA (LPP.WA) is 10.4%.

The Cost of Equity of LPP SA (LPP.WA) is 12.35%.

The Cost of Debt of LPP SA (LPP.WA) is 5.10%.

	Range	Selected
Cost of equity	10.90% - 13.80%	12.35%
Tax rate	21.90% - 22.50%	22.20%
Cost of debt	4.00% - 6.20%	5.10%
WACC	9.1% - 11.7%	10.4%

WACC

LPP.WA WACC calculation

Category	Low	High

Long-term bond rate	5.5%	6.0%
Equity market risk premium	6.3%	7.3%
Adjusted beta	0.85	0.99

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.90%	13.80%

Tax rate	21.90%	22.50%
Debt/Equity ratio	0.3	0.3
Cost of debt	4.00%	6.20%

After-tax WACC	9.1%	11.7%


Selected WACC	10.4%

LPP.WA'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 LPP.WA:

cost_of_equity (12.35%) = risk_free_rate (5.75%) + equity_risk_premium (6.80%) * adjusted_beta (0.85) + 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.