DLX
Deluxe Corp
Price:  
19.62 
USD
Volume:  
214,137.00
United States | Commercial Services & Supplies
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DLX WACC - Weighted Average Cost of Capital

The WACC of Deluxe Corp (DLX) is 7.0%.

The Cost of Equity of Deluxe Corp (DLX) is 11.05%.
The Cost of Debt of Deluxe Corp (DLX) is 6.85%.

Range Selected
Cost of equity 9.60% - 12.50% 11.05%
Tax rate 32.20% - 33.50% 32.85%
Cost of debt 6.20% - 7.50% 6.85%
WACC 6.2% - 7.7% 7.0%
WACC

DLX WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.25 1.37
Additional risk adjustments 0.0% 0.5%
Cost of equity 9.60% 12.50%
Tax rate 32.20% 33.50%
Debt/Equity ratio 1.74 1.74
Cost of debt 6.20% 7.50%
After-tax WACC 6.2% 7.7%
Selected WACC 7.0%

DLX'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 DLX:

cost_of_equity (11.05%) = 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.