The WACC of Express Inc (EXPR) is 9.0%.
Range | Selected | |
Cost of equity | 44.7% - 148.8% | 96.75% |
Tax rate | 5.1% - 13.3% | 9.2% |
Cost of debt | 7.0% - 7.0% | 7% |
WACC | 7.8% - 10.3% | 9.0% |
Category | Low | High |
Long-term bond rate | 3.9% | 4.4% |
Equity market risk premium | 4.6% | 5.6% |
Adjusted beta | 8.88 | 25.7 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 44.7% | 148.8% |
Tax rate | 5.1% | 13.3% |
Debt/Equity ratio | 32.62 | 32.62 |
Cost of debt | 7.0% | 7.0% |
After-tax WACC | 7.8% | 10.3% |
Selected WACC | 9.0% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
EXPR | Express Inc | 32.62 | 1.25 | 0.04 |
ANF | Abercrombie & Fitch Co | 1.19 | 1.17 | 0.55 |
BOOT | Boot Barn Holdings Inc | 0 | 1.79 | 1.79 |
CAL | Caleres Inc | 0.51 | 0.77 | 0.52 |
CHS | Chico's FAS Inc | 0.05 | 0.08 | 0.08 |
GCO | Genesco Inc | 0.54 | 2.19 | 1.46 |
GES | Guess? Inc | 0.84 | 0.72 | 0.4 |
JILL | J.Jill Inc | 0.3 | 1.41 | 1.1 |
PLCE | Children's Place Inc | 4.22 | 3.38 | 0.69 |
SMRTQ | Stein Mart Inc | 188.09 | -0.34 | 0 |
Low | High | |
Unlevered beta | 0.47 | 0.61 |
Relevered beta | 12.76 | 37.87 |
Adjusted relevered beta | 8.88 | 25.7 |
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 EXPR:
cost_of_equity (96.75%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (8.88) + 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.