Hi Benny - not exactly sure we're talking the same talk, but...

Hi Benny - not exactly sure we're talking the same talk, but when you say 20% are you talking about the discount rate?? If so, it should come down once distribution agreements are in force.

The use of the term WACC is a "Finance 101" term, being the implied weighted average of debt and capital funding. In this instance, LBT doesn't have any debt so we're talking purely cost of capital. 16.5% pre-tax is extremely high I'd agree with you - particularly for companies like LBT that have significant tax and R&D concessions which act as tax shields, I would expect an after tax discount rate well below this, but hey they're pricing in risk (ie. uncertainties into their model).

Which ever way you slice and dice it, with some form of commitment in a sales agreement, this company is materially under-valued and on any good news could shoot quickly north.

Thanks