DC.L
Dixons Carphone PLC
Price:  
98.4 
GBP
Volume:  
2,710,790
United Kingdom | Specialty Retail

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

RangeSelected
Cost of equity7.6% - 10.4%9%
Tax rate19.4% - 21.7%20.55%
Cost of debt6.1% - 7.0%6.55%
WACC6.2% - 7.8%7.0%
WACC

DC.L WACC calculation

CategoryLowHigh
Long-term bond rate2.9%3.4%
Equity market risk premium5.3%6.3%
Adjusted beta0.881.03
Additional risk adjustments0.0%0.5%
Cost of equity7.6%10.4%
Tax rate19.4%21.7%
Debt/Equity ratio
1.121.12
Cost of debt6.1%7.0%
After-tax WACC6.2%7.8%
Selected WACC7.0%

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.