ATZ.TO WACC - Weighted Average Cost of Capital
The WACC of Aritzia Inc (ATZ.TO) is 5.7%.
| Range | Selected | |
| Cost of equity | 5.1% - 6.8% | 5.95% |
| Tax rate | 28.5% - 28.7% | 28.6% |
| Cost of debt | 4.4% - 5.9% | 5.15% |
| WACC | 4.9% - 6.5% | 5.7% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.37 | 0.43 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.1% | 6.8% |
| Tax rate | 28.5% | 28.7% |
| Debt/Equity ratio | 0.12 | 0.12 |
| Cost of debt | 4.4% | 5.9% |
| After-tax WACC | 4.9% | 6.5% |
| Selected WACC | 5.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| ATZ.TO | Aritzia Inc | 0.12 | 1.73 | 1.59 |
| BEBE | bebe stores inc | 4.22 | -0.74 | -0.18 |
| BGI | Birks Group Inc | 3.65 | 0.41 | 0.11 |
| BOOT | Boot Barn Holdings Inc | 1.01 | 1.46 | 0.85 |
| CHS | Chico's FAS Inc | 0.05 | 0.08 | 0.08 |
| DESTQ | Destination Maternity Corp | 32716.8 | -0.23 | 0 |
| EXPR | Express Inc | 32.62 | 1.25 | 0.05 |
| JILL | J.Jill Inc | 0.25 | 1.23 | 1.04 |
| LXR.TO | LXRandCo Inc | 11.72 | 1.69 | 0.18 |
| SMRTQ | Stein Mart Inc | 188.09 | -0.34 | 0 |
| Low | High | |
| Unlevered beta | 0.07 | 0.14 |
| Relevered beta | 0.06 | 0.15 |
| Adjusted relevered beta | 0.37 | 0.43 |
ATZ.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 ATZ.TO:
cost_of_equity (5.95%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.37) + 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.