BKE
Buckle Inc
Price:  
43.16 
USD
Volume:  
897,437
United States | Specialty Retail

BKE WACC - Weighted Average Cost of Capital

The WACC of Buckle Inc (BKE) is 6.1%.

The Cost of Equity of Buckle Inc (BKE) is 8.4%.
The Cost of Debt of Buckle Inc (BKE) is 5%.

RangeSelected
Cost of equity7.0% - 9.8%8.4%
Tax rate24.0% - 24.1%24.05%
Cost of debt5.0% - 5.0%5%
WACC5.4% - 6.8%6.1%
WACC

BKE WACC calculation

CategoryLowHigh
Long-term bond rate3.9%4.4%
Equity market risk premium4.6%5.6%
Adjusted beta0.670.88
Additional risk adjustments0.0%0.5%
Cost of equity7.0%9.8%
Tax rate24.0%24.1%
Debt/Equity ratio
11
Cost of debt5.0%5.0%
After-tax WACC5.4%6.8%
Selected WACC6.1%

BKE'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 BKE:

cost_of_equity (8.40%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.67) + 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.