BOO.L WACC - Weighted Average Cost of Capital
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 |
BOO.L'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 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.