DC.L WACC - Weighted Average Cost of Capital
The WACC of Dixons Carphone PLC (DC.L) is 7.0%.
| Range | Selected | |
| Cost of equity | 7.6% - 10.4% | 9% |
| Tax rate | 19.4% - 21.7% | 20.55% |
| Cost of debt | 6.1% - 7.0% | 6.55% |
| WACC | 6.2% - 7.8% | 7.0% |
| 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 | 7.6% | 10.4% |
| Tax rate | 19.4% | 21.7% |
| Debt/Equity ratio | 1.12 | 1.12 |
| Cost of debt | 6.1% | 7.0% |
| After-tax WACC | 6.2% | 7.8% |
| Selected WACC | 7.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| DC.L | Dixons Carphone PLC | 1.12 | 0 | 0 |
| AVT.PA | Avenir Telecom SA | 0.98 | -0.54 | -0.3 |
| CEC.DE | Ceconomy AG | 1.44 | 1.53 | 0.71 |
| FNAC.PA | Fnac Darty SA | 2.35 | 1.64 | 0.57 |
| GVNV.AS | Grandvision NV | 0.28 | 0.43 | 0.35 |
| KOM.WA | Komputronik SA | 0.52 | 0.11 | 0.08 |
| PLAIS.AT | Plaisio Computers SA | 0.53 | 0.61 | 0.43 |
| TKNSA.IS | Teknosa Ic ve Dis Ticaret AS | 0.46 | 1.6 | 1.17 |
| UNIR.MI | Unieuro SpA | 1.83 | 0.37 | 0.15 |
| GME | GameStop Corp | 0 | 0.07 | 0.07 |
| HGGGQ | hhgregg Inc | 709.92 | -0.43 | 0 |
| Low | High | |
| Unlevered beta | 0.08 | 0.35 |
| Relevered beta | 0.82 | 1.04 |
| Adjusted relevered beta | 0.88 | 1.03 |
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.