KIRK
Kirkland's Inc
Price:  
1.16 
USD
Volume:  
93,404.00
United States | Specialty Retail
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Kirkland WACC - Weighted Average Cost of Capital

The WACC of Kirkland's Inc (KIRK) is 6.9%.

The Cost of Equity of Kirkland's Inc (KIRK) is 7.05%.
The Cost of Debt of Kirkland's Inc (KIRK) is 7.00%.

Range Selected
Cost of equity 5.90% - 8.20% 7.05%
Tax rate 1.70% - 6.30% 4.00%
Cost of debt 7.00% - 7.00% 7.00%
WACC 6.5% - 7.3% 6.9%
WACC

Kirkland 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 0.59
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.90% 8.20%
Tax rate 1.70% 6.30%
Debt/Equity ratio 1.26 1.26
Cost of debt 7.00% 7.00%
After-tax WACC 6.5% 7.3%
Selected WACC 6.9%

Kirkland'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 Kirkland:

cost_of_equity (7.05%) = 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.