LUKN.SW
Luzerner Kantonalbank AG
Price:  
71.1 
CHF
Volume:  
7,734
Switzerland | Banks

LUKN.SW WACC - Weighted Average Cost of Capital

The WACC of Luzerner Kantonalbank AG (LUKN.SW) is 4.9%.

The Cost of Equity of Luzerner Kantonalbank AG (LUKN.SW) is 7.9%.
The Cost of Debt of Luzerner Kantonalbank AG (LUKN.SW) is 5%.

RangeSelected
Cost of equity5.5% - 10.3%7.9%
Tax rate14.2% - 14.3%14.25%
Cost of debt5.0% - 5.0%5%
WACC4.5% - 5.3%4.9%
WACC

LUKN.SW WACC calculation

CategoryLowHigh
Long-term bond rate1.1%1.6%
Equity market risk premium4.7%5.7%
Adjusted beta0.931.42
Additional risk adjustments0.0%0.5%
Cost of equity5.5%10.3%
Tax rate14.2%14.3%
Debt/Equity ratio
4.674.67
Cost of debt5.0%5.0%
After-tax WACC4.5%5.3%
Selected WACC4.9%

LUKN.SW'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 LUKN.SW:

cost_of_equity (7.90%) = risk_free_rate (1.35%) + equity_risk_premium (5.20%) * adjusted_beta (0.93) + 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.