DELL WACC - Weighted Average Cost of Capital
The WACC of Dell Technologies Inc (DELL) is 9.4%.
| Range | Selected | |
| Cost of equity | 9.6% - 12.9% | 11.25% |
| Tax rate | 13.7% - 16.9% | 15.3% |
| Cost of debt | 4.7% - 5.1% | 4.9% |
| WACC | 8.1% - 10.6% | 9.4% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 1.25 | 1.44 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.6% | 12.9% |
| Tax rate | 13.7% | 16.9% |
| Debt/Equity ratio | 0.37 | 0.37 |
| Cost of debt | 4.7% | 5.1% |
| After-tax WACC | 8.1% | 10.6% |
| Selected WACC | 9.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| DELL | Dell Technologies Inc | 0.37 | 2.3 | 1.76 |
| CRSR | Corsair Gaming Inc | 0.22 | 2.02 | 1.71 |
| DBD | Diebold Nixdorf Inc | 0.54 | 1.15 | 0.79 |
| HPE | Hewlett Packard Enterprise Co | 0.82 | 2.01 | 1.19 |
| HPQ | HP Inc | 0.39 | 1.22 | 0.92 |
| KODK | Eastman Kodak Co | 1.07 | 1.94 | 1.02 |
| NNDM | Nano Dimension Ltd | 0.04 | 1.11 | 1.08 |
| NTAP | NetApp Inc | 0.13 | 1.53 | 1.38 |
| OSS | One Stop Systems Inc | 0.02 | 1.79 | 1.76 |
| SCKT | Socket Mobile Inc | 0.39 | 1.22 | 0.92 |
| STX | Seagate Technology PLC | 0.28 | 1.98 | 1.6 |
| Low | High | |
| Unlevered beta | 1.08 | 1.38 |
| Relevered beta | 1.37 | 1.66 |
| Adjusted relevered beta | 1.25 | 1.44 |
DELL'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 DELL:
cost_of_equity (11.25%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.25) + 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.