DOCS.L WACC - Weighted Average Cost of Capital

The WACC of Dr Martens PLC (DOCS.L) is 11.4%.

The Cost of Equity of Dr Martens PLC (DOCS.L) is 15.30%.

The Cost of Debt of Dr Martens PLC (DOCS.L) is 6.10%.

	Range	Selected
Cost of equity	14.00% - 16.60%	15.30%
Tax rate	23.00% - 34.90%	28.95%
Cost of debt	5.10% - 7.10%	6.10%
WACC	10.4% - 12.4%	11.4%

WACC

DOCS.L WACC calculation

Category	Low	High

Long-term bond rate	4.0%	4.5%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.67	1.67

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.00%	16.60%

Tax rate	23.00%	34.90%
Debt/Equity ratio	0.54	0.54
Cost of debt	5.10%	7.10%

After-tax WACC	10.4%	12.4%


Selected WACC	11.4%

DOCS.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 DOCS.L:

cost_of_equity (15.30%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (1.67) + 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.