LSEA
Landsea Homes Corp
Price:  
11.31 
USD
Volume:  
1,654,150.00
United States | Household Durables
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LSEA WACC - Weighted Average Cost of Capital

The WACC of Landsea Homes Corp (LSEA) is 5.9%.

The Cost of Equity of Landsea Homes Corp (LSEA) is 10.75%.
The Cost of Debt of Landsea Homes Corp (LSEA) is 4.25%.

Range Selected
Cost of equity 8.70% - 12.80% 10.75%
Tax rate 23.50% - 25.80% 24.65%
Cost of debt 4.00% - 4.50% 4.25%
WACC 5.1% - 6.8% 5.9%
WACC

LSEA WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.05 1.41
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.70% 12.80%
Tax rate 23.50% 25.80%
Debt/Equity ratio 1.76 1.76
Cost of debt 4.00% 4.50%
After-tax WACC 5.1% 6.8%
Selected WACC 5.9%

LSEA'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 LSEA:

cost_of_equity (10.75%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.05) + 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.