DNLM.L WACC - Weighted Average Cost of Capital
The WACC of Dunelm Group PLC (DNLM.L) is 7.8%.
| Range | Selected | |
| Cost of equity | 7.2% - 9.7% | 8.45% |
| Tax rate | 19.6% - 20.2% | 19.9% |
| Cost of debt | 4.0% - 4.6% | 4.3% |
| WACC | 6.7% - 9.0% | 7.8% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.54 | 0.67 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.2% | 9.7% |
| Tax rate | 19.6% | 20.2% |
| Debt/Equity ratio | 0.14 | 0.14 |
| Cost of debt | 4.0% | 4.6% |
| After-tax WACC | 6.7% | 9.0% |
| Selected WACC | 7.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| DNLM.L | Dunelm Group PLC | 0.14 | 0.97 | 0.87 |
| APR.WA | Auto Partner SA | 0.18 | 0.74 | 0.65 |
| BBED.AS | Beter Bed Holding NV | 0.28 | 1.99 | 1.62 |
| CAFO.PA | Cafom SA | 1.77 | 0.36 | 0.15 |
| FESTI.IC | Festi hf | 0.47 | 0.46 | 0.33 |
| FOYRK.AT | Fourlis SA | 1.46 | 0.57 | 0.26 |
| KID.OL | Kid ASA | 0.28 | 0.37 | 0.3 |
| MDM.PA | Maisons du Monde SA | 6.98 | 1.58 | 0.24 |
| SCS.L | SCS Group PLC | 1.12 | -0.47 | -0.25 |
| SHOE.L | Shoe Zone PLC | 0.67 | 1.24 | 0.81 |
| Low | High | |
| Unlevered beta | 0.28 | 0.46 |
| Relevered beta | 0.31 | 0.51 |
| Adjusted relevered beta | 0.54 | 0.67 |
DNLM.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 DNLM.L:
cost_of_equity (8.45%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.54) + 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.