LSFG WACC - Weighted Average Cost of Capital
The WACC of Lifestore Financial Group Inc (LSFG) is 5.6%.
| Range | Selected | |
| Cost of equity | 5.8% - 7.4% | 6.6% |
| Tax rate | 18.6% - 32.3% | 25.45% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.2% - 5.9% | 5.6% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.42 | 0.45 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.8% | 7.4% |
| Tax rate | 18.6% | 32.3% |
| Debt/Equity ratio | 0.57 | 0.57 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.2% | 5.9% |
| Selected WACC | 5.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| LSFG | Lifestore Financial Group Inc | 0.57 | 0.15 | 0.1 |
| BRBW | Brunswick Bancorp | 1.02 | 0.18 | 0.1 |
| CCBC | Chino Commercial Bancorp | 0.41 | -0.42 | -0.32 |
| CIWV | Citizens Financial Corp | 0.66 | 0.13 | 0.09 |
| FOTB | First Ottawa Bancshares Inc | 0.45 | 0.12 | 0.09 |
| FRFC | First Robinson Financial Cororation | 3.97 | 0.2 | 0.05 |
| MFBP | M&F Bancorp Inc | 0 | 0.31 | 0.31 |
| PCLB | Pinnacle Bancshares Inc | 0.4 | 0.26 | 0.2 |
| PEBC | Peoples Bancorp Inc | 0.07 | 0.16 | 0.15 |
| UBAB | United Bancorporation of Alabama Inc | 0.06 | 0.45 | 0.43 |
| Low | High | |
| Unlevered beta | 0.09 | 0.12 |
| Relevered beta | 0.13 | 0.18 |
| Adjusted relevered beta | 0.42 | 0.45 |
LSFG'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 LSFG:
cost_of_equity (6.60%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.42) + 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.