LTHM.L WACC - Weighted Average Cost of Capital
The WACC of James Latham PLC (LTHM.L) is 7.7%.
| Range | Selected | |
| Cost of equity | 7.0% - 8.7% | 7.85% |
| Tax rate | 20.0% - 20.7% | 20.35% |
| Cost of debt | 4.0% - 4.6% | 4.3% |
| WACC | 6.9% - 8.5% | 7.7% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.51 | 0.54 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.0% | 8.7% |
| Tax rate | 20.0% | 20.7% |
| Debt/Equity ratio | 0.04 | 0.04 |
| Cost of debt | 4.0% | 4.6% |
| After-tax WACC | 6.9% | 8.5% |
| Selected WACC | 7.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| LTHM.L | James Latham PLC | 0.04 | 0.28 | 0.27 |
| BERG B.ST | Bergman & Beving AB | 0.22 | 0.74 | 0.62 |
| BOW.WA | Bowim SA | 0.22 | 1 | 0.86 |
| ELTON.AT | Elton SA | 0.59 | 0.42 | 0.29 |
| FLO.L | Flowtech Fluidpower PLC | 0.73 | 0.12 | 0.07 |
| GRN.WA | Grodno SA | 0.54 | 0.45 | 0.31 |
| HMU.DE | HMS Bergbau AG | 0.12 | -0.04 | -0.04 |
| OEM B.ST | OEM International AB | 0.01 | 0.73 | 0.73 |
| SANI.CO | Sanistaal A/S | 0.55 | 0.34 | 0.24 |
| TIM.WA | Tim SA | 0.16 | 0.2 | 0.18 |
| Low | High | |
| Unlevered beta | 0.26 | 0.3 |
| Relevered beta | 0.27 | 0.31 |
| Adjusted relevered beta | 0.51 | 0.54 |
LTHM.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 LTHM.L:
cost_of_equity (7.85%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.51) + 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.