GES
Guess? Inc
Price:  
16.87 
USD
Volume:  
472,101.00
United States | Specialty Retail
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GES WACC - Weighted Average Cost of Capital

The WACC of Guess? Inc (GES) is 7.0%.

The Cost of Equity of Guess? Inc (GES) is 8.75%.
The Cost of Debt of Guess? Inc (GES) is 4.80%.

Range Selected
Cost of equity 7.20% - 10.30% 8.75%
Tax rate 11.50% - 14.60% 13.05%
Cost of debt 4.00% - 5.60% 4.80%
WACC 5.8% - 8.2% 7.0%
WACC

GES WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.73 0.96
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.20% 10.30%
Tax rate 11.50% 14.60%
Debt/Equity ratio 0.61 0.61
Cost of debt 4.00% 5.60%
After-tax WACC 5.8% 8.2%
Selected WACC 7.0%

GES'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 GES:

cost_of_equity (8.75%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.73) + 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.