Leon's Furniture Ltd (LNF.TO) WACC Analysis

As of June 6, 2025, Leon's Furniture Ltd (LNF.TO) carries a Weighted Average Cost of Capital (WACC) of 6.5%. WACC reflects the blended rate Leon's Furniture Ltd must pay to both equity and debt holders.

Within that, the cost of equity is 6.2%, the cost of debt is 4.1%, and the effective tax rate is 24.0%.

Breakdown of WACC Components

• Long-term bond rate: 3.2% – 3.7%
• Equity market risk premium: 5.1% – 6.1%
• Adjusted beta: 0.59 – 0.67
• Additional risk adjustment: 0.0% – 0.5%
• Debt-to-equity ratio: 0.23

What It Means for Investors

With a selected WACC of 6.5%, Leon's Furniture Ltd must ensure any new investment returns exceed this threshold to generate shareholder value. This level reflects an attractive low cost of capital.