LSTR
Landstar System Inc
Price:  
131.71 
USD
Volume:  
303,013.00
United States | Road & Rail
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LSTR WACC - Weighted Average Cost of Capital

The WACC of Landstar System Inc (LSTR) is 7.8%.

The Cost of Equity of Landstar System Inc (LSTR) is 7.85%.
The Cost of Debt of Landstar System Inc (LSTR) is 7.75%.

Range Selected
Cost of equity 6.60% - 9.10% 7.85%
Tax rate 23.60% - 24.00% 23.80%
Cost of debt 5.10% - 10.40% 7.75%
WACC 6.5% - 9.0% 7.8%
WACC

LSTR WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.59 0.75
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.60% 9.10%
Tax rate 23.60% 24.00%
Debt/Equity ratio 0.03 0.03
Cost of debt 5.10% 10.40%
After-tax WACC 6.5% 9.0%
Selected WACC 7.8%

LSTR'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 LSTR:

cost_of_equity (7.85%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.59) + 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.