LWRK.TO
LifeWorks Inc
Price:  
32.27 
CAD
Volume:  
318,013.00
Canada | Professional Services
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LWRK.TO WACC - Weighted Average Cost of Capital

The WACC of LifeWorks Inc (LWRK.TO) is 3.8%.

The Cost of Equity of LifeWorks Inc (LWRK.TO) is 3.90%.
The Cost of Debt of LifeWorks Inc (LWRK.TO) is 5.00%.

Range Selected
Cost of equity 3.00% - 4.80% 3.90%
Tax rate 31.60% - 32.80% 32.20%
Cost of debt 5.00% - 5.00% 5.00%
WACC 3.1% - 4.5% 3.8%
WACC

LWRK.TO WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 5.1% 6.1%
Adjusted beta -0.02 0.11
Additional risk adjustments 0.0% 0.5%
Cost of equity 3.00% 4.80%
Tax rate 31.60% 32.80%
Debt/Equity ratio 0.26 0.26
Cost of debt 5.00% 5.00%
After-tax WACC 3.1% 4.5%
Selected WACC 3.8%

LWRK.TO'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 LWRK.TO:

cost_of_equity (3.90%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (-0.02) + 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.