ULTA.CN WACC - Weighted Average Cost of Capital
The WACC of Ultra Brands Ltd (ULTA.CN) is 7.9%.
| Range | Selected | |
| Cost of equity | 11.5% - 14.1% | 12.8% |
| Tax rate | 25.9% - 26.5% | 26.2% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 7.3% - 8.5% | 7.9% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 1.63 | 1.63 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 11.5% | 14.1% |
| Tax rate | 25.9% | 26.5% |
| Debt/Equity ratio | 1.16 | 1.16 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 7.3% | 8.5% |
| Selected WACC | 7.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| ULTA.CN | Ultra Brands Ltd | 1.72 | 1.95 | 0.86 |
| Low | High | |
| Unlevered beta | 0.86 | 0.86 |
| Relevered beta | 1.94 | 1.94 |
| Adjusted relevered beta | 1.63 | 1.63 |
ULTA.CN'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 ULTA.CN:
cost_of_equity (12.80%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (1.63) + 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.