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LKQ Corporation (LKQ) — WACC Analysis

WACC Breakdown

LKQ Corporation (LKQ) has a weighted average cost of capital (WACC) of 6.8%. The cost of equity is 8.5%, derived from a beta of 0.83 and a risk-free rate of 4.7%. The after-tax cost of debt is 4.1%. The capital structure is 61.6% equity and 38.4% debt.

Interpretation

A WACC of 6.8% suggests that the market views LKQ Corporation as relatively low-risk, with a lower cost of financing.

Investors can compare LKQ's WACC of 6.8% against industry peers to gauge its relative financing costs. A beta of 0.83 reflects the stock's volatility relative to the broader market.

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VALUATION

LKQ WACC: 6.81% for LKQ Corporation

Current inputs imply a 8.48% cost of equity and a 5.23% pre-tax cost of debt. Use this discount rate as a starting point for DCF validation.

[01]Current Market Data
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WACC Calculation Process
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Market Data Loaded
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Company Data Fetched
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Beta Calculated (5Y)
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Inputs Auto-Populated
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WACC Calculated
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Step 2: Enter Ticker Symbol
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Step 4: Review Auto-Populated WACC Inputs

Values are automatically populated from real data. You can adjust them manually if needed.

4.30%
1.000
4.23%
5.00%
21.00%
70.00%
Debt: 30.00%Equity: 70.00%

Please enter a valid company ticker to calculate WACC

LKQ Corporation Common Stock (LKQ) WACC Results
Weighted Average Cost of Capital
6.81%
Cost of Equity
8.48%
Risk-Free Rate4.73%
Beta0.83
Market Risk Premium4.23%
Cost of Debt
4.13%
Pre-Tax Cost of Debt5.23%
Tax Rate21.00%
Tax Shield1.10%
Capital Structure
Equity: 61.59%($6350.35M)
Debt: 38.41%($3961.00M)
Equity Component
5.22%
61.59% × 8.48%
Debt Component
1.59%
38.41% × 4.13%

LKQ Corporation (LKQ) WACC in context

LKQ Corporation (LKQ) currently screens with an estimated WACC of 6.81%. That blends a 8.48% cost of equity, a 5.23% pre-tax cost of debt, and a 61.59% equity weight into the discount rate you would typically use in a DCF model.

screens as a relatively low discount rate, which usually supports higher DCF values.

What LKQ WACC implies

A 6.81% discount rate screens as a relatively low discount rate, which usually supports higher DCF values.

How this page calculates LKQ

This page combines CAPM-based cost of equity with SEC-derived debt and capital structure inputs. The current beta is 0.83 and equity accounts for 61.59% of capital.

What to do next

Validate business quality on the company page, then carry the same discount-rate assumptions into the DCF page to test fair value sensitivity.

Disclaimer: This is not financial advice. Data sourced from SEC EDGAR and Polygon.io. Past performance does not guarantee future results. Always conduct your own research before making investment decisions.