CALM
Cal-Maine Foods Inc
Price:  
92.91 
USD
Volume:  
649,478.00
United States | Food Products
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CALM WACC - Weighted Average Cost of Capital

The WACC of Cal-Maine Foods Inc (CALM) is 6.8%.

The Cost of Equity of Cal-Maine Foods Inc (CALM) is 9.75%.
The Cost of Debt of Cal-Maine Foods Inc (CALM) is 5.00%.

Range Selected
Cost of equity 7.70% - 11.80% 9.75%
Tax rate 22.00% - 23.60% 22.80%
Cost of debt 5.00% - 5.00% 5.00%
WACC 5.8% - 7.8% 6.8%
WACC

CALM WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.84 1.24
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.70% 11.80%
Tax rate 22.00% 23.60%
Debt/Equity ratio 1 1
Cost of debt 5.00% 5.00%
After-tax WACC 5.8% 7.8%
Selected WACC 6.8%

CALM'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 CALM:

cost_of_equity (9.75%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.84) + 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.