VSCO
Victoria's Secret & Co
Price:  
19.32 
USD
Volume:  
3,475,725.00
United States | Specialty Retail
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VSCO WACC - Weighted Average Cost of Capital

The WACC of Victoria's Secret & Co (VSCO) is 8.1%.

The Cost of Equity of Victoria's Secret & Co (VSCO) is 10.85%.
The Cost of Debt of Victoria's Secret & Co (VSCO) is 4.80%.

Range Selected
Cost of equity 8.80% - 12.90% 10.85%
Tax rate 22.50% - 23.40% 22.95%
Cost of debt 4.00% - 5.60% 4.80%
WACC 6.6% - 9.6% 8.1%
WACC

VSCO WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.06 1.44
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.80% 12.90%
Tax rate 22.50% 23.40%
Debt/Equity ratio 0.63 0.63
Cost of debt 4.00% 5.60%
After-tax WACC 6.6% 9.6%
Selected WACC 8.1%

VSCO'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 VSCO:

cost_of_equity (10.85%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.06) + 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.