JD.L WACC - Weighted Average Cost of Capital
The WACC of JD Sports Fashion PLC (JD.L) is 8.4%.
| Range | Selected | |
| Cost of equity | 10.3% - 13.7% | 12% |
| Tax rate | 27.7% - 29.5% | 28.6% |
| Cost of debt | 4.1% - 5.1% | 4.6% |
| WACC | 7.3% - 9.6% | 8.4% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 1.06 | 1.25 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 10.3% | 13.7% |
| Tax rate | 27.7% | 29.5% |
| Debt/Equity ratio | 0.7 | 0.7 |
| Cost of debt | 4.1% | 5.1% |
| After-tax WACC | 7.3% | 9.6% |
| Selected WACC | 8.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| JD.L | JD Sports Fashion PLC | 0.99 | 0.68 | 0.4 |
| BELA.AT | Jumbo SA | 0.02 | 1.21 | 1.19 |
| DUFN.SW | Dufry AG | 1.42 | 1.15 | 0.57 |
| FIE.DE | Fielmann AG | 0.12 | 0.88 | 0.81 |
| FRAS.L | Frasers Group PLC | 0.51 | 1.11 | 0.81 |
| G4M.L | Gear4music Holdings PLC | 0.55 | 1.75 | 1.26 |
| GVNV.AS | Grandvision NV | 0.28 | 0.43 | 0.36 |
| VALN.SW | Valora Holding AG | 1.21 | 1.15 | 0.62 |
| WOSG.L | Watches of Switzerland Group PLC | 0.61 | 1.99 | 1.39 |
| DKS | Dick's Sporting Goods Inc | 0.09 | 1.15 | 1.08 |
| Low | High | |
| Unlevered beta | 0.73 | 0.92 |
| Relevered beta | 1.09 | 1.37 |
| Adjusted relevered beta | 1.06 | 1.25 |
JD.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 JD.L:
cost_of_equity (12.00%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (1.06) + 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.