SIG
Signet Jewelers Ltd
Price:  
66.78 
USD
Volume:  
1,084,950.00
Bermuda | Specialty Retail
Valuation
Overview
Financials
Forecast
Compare
Historical Price
SolvencyDividends
Transactions
People

SIG WACC - Weighted Average Cost of Capital

The WACC of Signet Jewelers Ltd (SIG) is 6.9%.

The Cost of Equity of Signet Jewelers Ltd (SIG) is 9.15%.
The Cost of Debt of Signet Jewelers Ltd (SIG) is 7.00%.

Range Selected
Cost of equity 6.70% - 11.60% 9.15%
Tax rate 22.60% - 36.30% 29.45%
Cost of debt 4.50% - 9.50% 7.00%
WACC 5.1% - 8.8% 6.9%
WACC

SIG WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.61 1.2
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.70% 11.60%
Tax rate 22.60% 36.30%
Debt/Equity ratio 1 1
Cost of debt 4.50% 9.50%
After-tax WACC 5.1% 8.8%
Selected WACC 6.9%

SIG'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 SIG:

cost_of_equity (9.15%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.61) + 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.