DOCS.L WACC - Weighted Average Cost of Capital
The WACC of Dr Martens PLC (DOCS.L) is 8.5%.
| Range | Selected | |
| Cost of equity | 10.8% - 13.0% | 11.9% |
| Tax rate | 23.0% - 25.7% | 24.35% |
| Cost of debt | 4.0% - 7.1% | 5.55% |
| WACC | 7.4% - 9.6% | 8.5% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 1.15 | 1.15 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 10.8% | 13.0% |
| Tax rate | 23.0% | 25.7% |
| Debt/Equity ratio | 0.8 | 0.8 |
| Cost of debt | 4.0% | 7.1% |
| After-tax WACC | 7.4% | 9.6% |
| Selected WACC | 8.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| DOCS.L | Dr Martens PLC | 0.8 | 1.22 | 0.76 |
| Low | High | |
| Unlevered beta | 0.76 | 0.76 |
| Relevered beta | 1.22 | 1.22 |
| Adjusted relevered beta | 1.15 | 1.15 |
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 (11.90%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (1.15) + 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.