LSAA.L
Life Settlement Assets PLC
Price:  
1.8 
USD
Volume:  
202,285
United Kingdom | Capital Markets

LSAA.L WACC - Weighted Average Cost of Capital

The WACC of Life Settlement Assets PLC (LSAA.L) is 6.9%.

The Cost of Equity of Life Settlement Assets PLC (LSAA.L) is 8.8%.
The Cost of Debt of Life Settlement Assets PLC (LSAA.L) is 5%.

RangeSelected
Cost of equity7.3% - 10.3%8.8%
Tax rate0.2% - 0.5%0.35%
Cost of debt5.0% - 5.0%5%
WACC6.1% - 7.7%6.9%
WACC

LSAA.L WACC calculation

CategoryLowHigh
Long-term bond rate4.0%4.5%
Equity market risk premium5.5%6.5%
Adjusted beta0.60.82
Additional risk adjustments0.0%0.5%
Cost of equity7.3%10.3%
Tax rate0.2%0.5%
Debt/Equity ratio
11
Cost of debt5.0%5.0%
After-tax WACC6.1%7.7%
Selected WACC6.9%

LSAA.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 LSAA.L:

cost_of_equity (8.80%) = risk_free_rate (4.25%) + equity_risk_premium (6.00%) * adjusted_beta (0.6) + 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.