LRE.MC
Lar Espana Real Estate SOCIMI SA
Price:  
8.29 
EUR
Volume:  
458.00
Spain | Equity Real Estate Investment Trusts (REITs)
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LRE.MC WACC - Weighted Average Cost of Capital

The WACC of Lar Espana Real Estate SOCIMI SA (LRE.MC) is 7.9%.

The Cost of Equity of Lar Espana Real Estate SOCIMI SA (LRE.MC) is 11.20%.
The Cost of Debt of Lar Espana Real Estate SOCIMI SA (LRE.MC) is 4.40%.

Range Selected
Cost of equity 9.70% - 12.70% 11.20%
Tax rate 0.80% - 2.10% 1.45%
Cost of debt 4.00% - 4.80% 4.40%
WACC 6.9% - 8.8% 7.9%
WACC

LRE.MC WACC calculation

Category Low High
Long-term bond rate 3.1% 3.6%
Equity market risk premium 7.4% 8.4%
Adjusted beta 0.89 1.02
Additional risk adjustments 0.0% 0.5%
Cost of equity 9.70% 12.70%
Tax rate 0.80% 2.10%
Debt/Equity ratio 0.94 0.94
Cost of debt 4.00% 4.80%
After-tax WACC 6.9% 8.8%
Selected WACC 7.9%

LRE.MC'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 LRE.MC:

cost_of_equity (11.20%) = risk_free_rate (3.35%) + equity_risk_premium (7.90%) * adjusted_beta (0.89) + 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.