DC.L
Dixons Carphone PLC
Price:  
98.40 
GBP
Volume:  
2,710,790.00
United Kingdom | Specialty Retail
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DC.L WACC - Weighted Average Cost of Capital

The WACC of Dixons Carphone PLC (DC.L) is 7.0%.

The Cost of Equity of Dixons Carphone PLC (DC.L) is 9.00%.
The Cost of Debt of Dixons Carphone PLC (DC.L) is 6.55%.

Range Selected
Cost of equity 7.60% - 10.40% 9.00%
Tax rate 19.40% - 21.70% 20.55%
Cost of debt 6.10% - 7.00% 6.55%
WACC 6.2% - 7.8% 7.0%
WACC

DC.L WACC calculation

Category Low High
Long-term bond rate 2.9% 3.4%
Equity market risk premium 5.3% 6.3%
Adjusted beta 0.88 1.03
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.60% 10.40%
Tax rate 19.40% 21.70%
Debt/Equity ratio 1.12 1.12
Cost of debt 6.10% 7.00%
After-tax WACC 6.2% 7.8%
Selected WACC 7.0%

DC.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 DC.L:

cost_of_equity (9.00%) = risk_free_rate (3.15%) + equity_risk_premium (5.80%) * adjusted_beta (0.88) + 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.