GES
Guess? Inc
Price:  
16.81 
USD
Volume:  
980,044.00
United States | Specialty Retail
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GES WACC - Weighted Average Cost of Capital

The WACC of Guess? Inc (GES) is 6.8%.

The Cost of Equity of Guess? Inc (GES) is 8.05%.
The Cost of Debt of Guess? Inc (GES) is 5.50%.

Range Selected
Cost of equity 5.90% - 10.20% 8.05%
Tax rate 11.50% - 14.60% 13.05%
Cost of debt 4.00% - 7.00% 5.50%
WACC 5.0% - 8.6% 6.8%
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 0.44 0.95
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.90% 10.20%
Tax rate 11.50% 14.60%
Debt/Equity ratio 0.6 0.6
Cost of debt 4.00% 7.00%
After-tax WACC 5.0% 8.6%
Selected WACC 6.8%

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 (8.05%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.44) + 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.