PLCE
Children's Place Inc
Price:  
5.01 
USD
Volume:  
568,104.00
United States | Specialty Retail
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PLCE WACC - Weighted Average Cost of Capital

The WACC of Children's Place Inc (PLCE) is 6.8%.

The Cost of Equity of Children's Place Inc (PLCE) is 7.30%.
The Cost of Debt of Children's Place Inc (PLCE) is 9.95%.

Range Selected
Cost of equity 6.00% - 8.60% 7.30%
Tax rate 31.10% - 34.50% 32.80%
Cost of debt 7.50% - 12.40% 9.95%
WACC 5.3% - 8.2% 6.8%
WACC

PLCE WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.47 0.67
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.00% 8.60%
Tax rate 31.10% 34.50%
Debt/Equity ratio 3.41 3.41
Cost of debt 7.50% 12.40%
After-tax WACC 5.3% 8.2%
Selected WACC 6.8%

PLCE'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 PLCE:

cost_of_equity (7.30%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.47) + 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.