DJCO
Daily Journal Corp
Price:  
391.62 
USD
Volume:  
7,852.00
United States | Media
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DJCO WACC - Weighted Average Cost of Capital

The WACC of Daily Journal Corp (DJCO) is 6.7%.

The Cost of Equity of Daily Journal Corp (DJCO) is 6.75%.
The Cost of Debt of Daily Journal Corp (DJCO) is 6.55%.

Range Selected
Cost of equity 5.60% - 7.90% 6.75%
Tax rate 24.50% - 25.50% 25.00%
Cost of debt 4.00% - 9.10% 6.55%
WACC 5.5% - 7.8% 6.7%
WACC

DJCO WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.39 0.54
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.60% 7.90%
Tax rate 24.50% 25.50%
Debt/Equity ratio 0.05 0.05
Cost of debt 4.00% 9.10%
After-tax WACC 5.5% 7.8%
Selected WACC 6.7%

DJCO'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 DJCO:

cost_of_equity (6.75%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.39) + 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.