LTS.WA WACC - Weighted Average Cost of Capital

The WACC of Grupa Lotos SA (LTS.WA) is 10.9%.

The Cost of Equity of Grupa Lotos SA (LTS.WA) is 12.45%.

The Cost of Debt of Grupa Lotos SA (LTS.WA) is 5.40%.

	Range	Selected
Cost of equity	10.60% - 14.30%	12.45%
Tax rate	31.30% - 31.80%	31.55%
Cost of debt	4.70% - 6.10%	5.40%
WACC	9.3% - 12.5%	10.9%

WACC

LTS.WA WACC calculation

Category	Low	High

Long-term bond rate	5.5%	6.0%
Equity market risk premium	6.3%	7.3%
Adjusted beta	0.81	1.06

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.60%	14.30%

Tax rate	31.30%	31.80%
Debt/Equity ratio	0.22	0.22
Cost of debt	4.70%	6.10%

After-tax WACC	9.3%	12.5%


Selected WACC	10.9%

LTS.WA'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 LTS.WA:

cost_of_equity (12.45%) = risk_free_rate (5.75%) + equity_risk_premium (6.80%) * adjusted_beta (0.81) + 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.