LTH.VI WACC - Weighted Average Cost of Capital

The WACC of Linz Textil Holding AG (LTH.VI) is 6.3%.

The Cost of Equity of Linz Textil Holding AG (LTH.VI) is 6.30%.

The Cost of Debt of Linz Textil Holding AG (LTH.VI) is 6.80%.

	Range	Selected
Cost of equity	5.20% - 7.40%	6.30%
Tax rate	19.30% - 21.00%	20.15%
Cost of debt	4.00% - 9.60%	6.80%
WACC	5.2% - 7.4%	6.3%

WACC

LTH.VI WACC calculation

Category	Low	High

Long-term bond rate	2.8%	3.3%
Equity market risk premium	5.7%	6.7%
Adjusted beta	0.43	0.54

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.20%	7.40%

Tax rate	19.30%	21.00%
Debt/Equity ratio	0	0
Cost of debt	4.00%	9.60%

After-tax WACC	5.2%	7.4%


Selected WACC	6.3%

LTH.VI'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 LTH.VI:

cost_of_equity (6.30%) = risk_free_rate (3.05%) + equity_risk_premium (6.20%) * adjusted_beta (0.43) + 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.