LUDN.TA WACC - Weighted Average Cost of Capital

The WACC of Ludan Engineering Co Ltd (LUDN.TA) is 8.9%.

The Cost of Equity of Ludan Engineering Co Ltd (LUDN.TA) is 13.20%.

The Cost of Debt of Ludan Engineering Co Ltd (LUDN.TA) is 5.40%.

	Range	Selected
Cost of equity	11.80% - 14.60%	13.20%
Tax rate	24.90% - 25.20%	25.05%
Cost of debt	4.80% - 6.00%	5.40%
WACC	7.9% - 9.9%	8.9%

WACC

LUDN.TA WACC calculation

Category	Low	High

Long-term bond rate	4.8%	5.3%
Equity market risk premium	6.1%	7.1%
Adjusted beta	1.13	1.23

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.80%	14.60%

Tax rate	24.90%	25.20%
Debt/Equity ratio	0.88	0.88
Cost of debt	4.80%	6.00%

After-tax WACC	7.9%	9.9%


Selected WACC	8.9%

LUDN.TA'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 LUDN.TA:

cost_of_equity (13.20%) = risk_free_rate (5.05%) + equity_risk_premium (6.60%) * adjusted_beta (1.13) + 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.