NAKD WACC - Weighted Average Cost of Capital
The WACC of Naked Brand Group Ltd (NAKD) is 7.6%.
| Range | Selected | |
| Cost of equity | 6.5% - 8.9% | 7.7% |
| Tax rate | 1.0% - 1.9% | 1.45% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.5% - 8.8% | 7.6% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 4.2% | 5.2% |
| Adjusted beta | 0.79 | 0.91 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.5% | 8.9% |
| Tax rate | 1.0% | 1.9% |
| Debt/Equity ratio | 0.03 | 0.03 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.5% | 8.8% |
| Selected WACC | 7.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| NAKD | Naked Brand Group Ltd | 0.03 | 0.6 | 0.58 |
| DOGZ | Dogness International Corp | 0.05 | -0.43 | -0.41 |
| FORD | Forward Industries Inc | 0.07 | -1.63 | -1.53 |
| IFA.TO | iFabric Corp | 0.07 | -0.12 | -0.11 |
| JLMC | JLM Couture Inc | 0.41 | 0.22 | 0.16 |
| JRSH | Jerash Holdings (US) Inc | 0.11 | 0.29 | 0.26 |
| KBSF | KBS Fashion Group Ltd | 0.09 | 1.36 | 1.25 |
| MENE.V | Mene Inc | 0.02 | 1.7 | 1.67 |
| TALN | Talon International Inc | 0.99 | -0.54 | -0.27 |
| UNI.TO | Unisync Corp | 2.19 | 0.04 | 0.01 |
| Low | High | |
| Unlevered beta | -0.04 | 0.2 |
| Relevered beta | 0.69 | 0.87 |
| Adjusted relevered beta | 0.79 | 0.91 |
NAKD'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 NAKD:
cost_of_equity (7.70%) = risk_free_rate (3.45%) + equity_risk_premium (4.70%) * adjusted_beta (0.79) + 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.