The WACC of Boohoo Group PLC (BOO.L) is 6.1%.
Range | Selected | |
Cost of equity | 6.3% - 10.8% | 8.55% |
Tax rate | 19.2% - 22.6% | 20.9% |
Cost of debt | 4.0% - 7.0% | 5.5% |
WACC | 4.6% - 7.7% | 6.1% |
Category | Low | High |
Long-term bond rate | 4.0% | 4.5% |
Equity market risk premium | 6.0% | 7.0% |
Adjusted beta | 0.39 | 0.83 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 6.3% | 10.8% |
Tax rate | 19.2% | 22.6% |
Debt/Equity ratio | 1.32 | 1.32 |
Cost of debt | 4.0% | 7.0% |
After-tax WACC | 4.6% | 7.7% |
Selected WACC | 6.1% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
BOO.L | Boohoo Group PLC | 1.32 | 0.96 | 0.47 |
AO.L | AO World PLC | 0.12 | 0.86 | 0.79 |
BHG.ST | BHG Group AB | 0.63 | 1.42 | 0.95 |
BTBB.DE | SLEEPZ AG | 0.4 | -0.47 | -0.36 |
CDON.ST | Cdon AB | 0.01 | 0.88 | 0.87 |
CNV.PA | Cnova NV | 24.7 | 0.62 | 0.03 |
GFG.DE | Global Fashion Group SA | 1.36 | 1.05 | 0.5 |
LAUR.ST | Lauritz.com Group A/S | 15.91 | 0.66 | 0.05 |
WEW.DE | Westwing Group AG | 0.2 | 0.5 | 0.44 |
ZO1.DE | Zooplus AG | 0.03 | 0.3 | 0.29 |
Low | High | |
Unlevered beta | 0.38 | 0.48 |
Relevered beta | 0.09 | 0.75 |
Adjusted relevered beta | 0.39 | 0.83 |
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 BOO.L:
cost_of_equity (8.55%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.39) + 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.