SIG
Signet Jewelers Ltd
Price:  
66.89 
USD
Volume:  
968,887
Bermuda | Specialty Retail

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%.

RangeSelected
Cost of equity6.7% - 11.6%9.15%
Tax rate22.6% - 36.3%29.45%
Cost of debt4.5% - 9.5%7%
WACC5.1% - 8.8%6.9%
WACC

SIG WACC calculation

CategoryLowHigh
Long-term bond rate3.9%4.4%
Equity market risk premium4.6%5.6%
Adjusted beta0.611.2
Additional risk adjustments0.0%0.5%
Cost of equity6.7%11.6%
Tax rate22.6%36.3%
Debt/Equity ratio
11
Cost of debt4.5%9.5%
After-tax WACC5.1%8.8%
Selected WACC6.9%

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.