LWAY
Lifeway Foods Inc
Price:  
25.54 
USD
Volume:  
48,401
United States | Food Products

LWAY WACC - Weighted Average Cost of Capital

The WACC of Lifeway Foods Inc (LWAY) is 4.9%.

The Cost of Equity of Lifeway Foods Inc (LWAY) is 6.95%.
The Cost of Debt of Lifeway Foods Inc (LWAY) is 4.4%.

RangeSelected
Cost of equity5.7% - 8.2%6.95%
Tax rate36.7% - 37.5%37.1%
Cost of debt4.3% - 4.5%4.4%
WACC4.2% - 5.5%4.9%
WACC

LWAY WACC calculation

CategoryLowHigh
Long-term bond rate3.9%4.4%
Equity market risk premium4.6%5.6%
Adjusted beta0.40.59
Additional risk adjustments0.0%0.5%
Cost of equity5.7%8.2%
Tax rate36.7%37.5%
Debt/Equity ratio
11
Cost of debt4.3%4.5%
After-tax WACC4.2%5.5%
Selected WACC4.9%

LWAY'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 LWAY:

cost_of_equity (6.95%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.4) + 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.