DESTQ WACC - Weighted Average Cost of Capital
The WACC of Destination Maternity Corp (DESTQ) is 4.4%.
| Range | Selected | |
| Cost of equity | 3927.1% - 11588.2% | 7757.65% |
| Tax rate | 38.2% - 42.0% | 40.1% |
| Cost of debt | 7.0% - 7.0% | 7% |
| WACC | 4.4% - 4.4% | 4.4% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 852.87 | 2068.46 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 3927.1% | 11588.2% |
| Tax rate | 38.2% | 42.0% |
| Debt/Equity ratio | 32716.8 | 32716.8 |
| Cost of debt | 7.0% | 7.0% |
| After-tax WACC | 4.4% | 4.4% |
| Selected WACC | 4.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| DESTQ | Destination Maternity Corp | 32716.8 | -0.23 | 0 |
| BEBE | bebe stores inc | 4.22 | -0.74 | -0.21 |
| BGI | Birks Group Inc | 3.79 | 0.4 | 0.12 |
| BOOT | Boot Barn Holdings Inc | 0 | 1.79 | 1.79 |
| CHS | Chico's FAS Inc | 0.05 | 0.08 | 0.08 |
| EXPR | Express Inc | 32.62 | 1.25 | 0.06 |
| GES | Guess? Inc | 0.84 | 0.72 | 0.48 |
| JILL | J.Jill Inc | 0.3 | 1.41 | 1.19 |
| LXR.TO | LXRandCo Inc | 11.72 | 1.69 | 0.21 |
| SMRTQ | Stein Mart Inc | 188.09 | -0.34 | 0 |
| Low | High | |
| Unlevered beta | 0.07 | 0.15 |
| Relevered beta | 1272.45 | 3086.76 |
| Adjusted relevered beta | 852.87 | 2068.46 |
DESTQ'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 DESTQ:
cost_of_equity (7,757.65%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (852.87) + 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.