BKE WACC - Weighted Average Cost of Capital
The WACC of Buckle Inc (BKE) is 6.1%.
| Range | Selected | |
| Cost of equity | 7.0% - 9.8% | 8.4% |
| Tax rate | 24.0% - 24.1% | 24.05% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.4% - 6.8% | 6.1% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.67 | 0.88 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.0% | 9.8% |
| Tax rate | 24.0% | 24.1% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.4% | 6.8% |
| Selected WACC | 6.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| BKE | Buckle Inc | 0.81 | 0.73 | 0.46 |
| ATZ.TO | Aritzia Inc | 0.12 | 1.83 | 1.67 |
| BOOT | Boot Barn Holdings Inc | 0 | 1.82 | 1.82 |
| CAL | Caleres Inc | 0.4 | 0.79 | 0.6 |
| CHS | Chico's FAS Inc | 0.05 | 0.08 | 0.08 |
| DBI | Designer Brands Inc | 3.29 | 1.34 | 0.38 |
| EXPR | Express Inc | 32.62 | 1.25 | 0.05 |
| GES | Guess? Inc | 0.92 | 0.63 | 0.37 |
| JILL | J.Jill Inc | 0.28 | 1.3 | 1.07 |
| LXR.TO | LXRandCo Inc | 11.72 | 1.69 | 0.17 |
| SMRTQ | Stein Mart Inc | 188.09 | -0.34 | 0 |
| Low | High | |
| Unlevered beta | 0.37 | 0.46 |
| Relevered beta | 0.51 | 0.82 |
| Adjusted relevered beta | 0.67 | 0.88 |
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.