VRA
Vera Bradley Inc
Price:  
2.15 
USD
Volume:  
302,471.00
United States | Textiles, Apparel & Luxury Goods
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VRA WACC - Weighted Average Cost of Capital

The WACC of Vera Bradley Inc (VRA) is 5.7%.

The Cost of Equity of Vera Bradley Inc (VRA) is 6.60%.
The Cost of Debt of Vera Bradley Inc (VRA) is 7.00%.

Range Selected
Cost of equity 5.40% - 7.80% 6.60%
Tax rate 28.10% - 31.90% 30.00%
Cost of debt 7.00% - 7.00% 7.00%
WACC 5.2% - 6.3% 5.7%
WACC

VRA WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.32 0.53
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.40% 7.80%
Tax rate 28.10% 31.90%
Debt/Equity ratio 1 1
Cost of debt 7.00% 7.00%
After-tax WACC 5.2% 6.3%
Selected WACC 5.7%

VRA'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 VRA:

cost_of_equity (6.60%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.32) + 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.