LWDB.L WACC - Weighted Average Cost of Capital
The WACC of Law Debenture Corporation PLC (LWDB.L) is 9.4%.
| Range | Selected | |
| Cost of equity | 8.8% - 11.4% | 10.1% |
| Tax rate | 1.8% - 2.0% | 1.9% |
| Cost of debt | 4.0% - 4.6% | 4.3% |
| WACC | 8.2% - 10.6% | 9.4% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.8 | 0.92 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.8% | 11.4% |
| Tax rate | 1.8% | 2.0% |
| Debt/Equity ratio | 0.14 | 0.14 |
| Cost of debt | 4.0% | 4.6% |
| After-tax WACC | 8.2% | 10.6% |
| Selected WACC | 9.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| LWDB.L | Law Debenture Corporation PLC | 0.14 | 1.26 | 1.11 |
| DBAN.DE | Deutsche Beteiligungs AG | 0.29 | 0.95 | 0.74 |
| EQV1V.HE | eQ Oyj | 0.01 | 0.57 | 0.57 |
| GIMB.BR | Gimv NV | 0.23 | 0.74 | 0.6 |
| GROW.L | Draper Esprit PLC | 0.16 | 1.82 | 1.57 |
| LIO.L | Liontrust Asset Management PLC | 0.02 | 1.69 | 1.66 |
| MWY.L | Mid Wynd International Investment Trust PLC | 0.02 | 0.64 | 0.63 |
| OCI.L | Oakley Capital Investments Ltd | 0.13 | 0.95 | 0.84 |
| TIP.MI | Tamburi Investment Partners SpA | 0.3 | 0.64 | 0.5 |
| VPBN.SW | VP Bank AG | 0.41 | 0.42 | 0.3 |
| Low | High | |
| Unlevered beta | 0.62 | 0.78 |
| Relevered beta | 0.7 | 0.88 |
| Adjusted relevered beta | 0.8 | 0.92 |
LWDB.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 LWDB.L:
cost_of_equity (10.10%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.8) + 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.