CL
Colgate-Palmolive Co
Price:  
84.45 
USD
Volume:  
4,189,198.00
United States | Household Products
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CL WACC - Weighted Average Cost of Capital

The WACC of Colgate-Palmolive Co (CL) is 6.2%.

The Cost of Equity of Colgate-Palmolive Co (CL) is 6.55%.
The Cost of Debt of Colgate-Palmolive Co (CL) is 4.25%.

Range Selected
Cost of equity 5.60% - 7.50% 6.55%
Tax rate 23.70% - 25.00% 24.35%
Cost of debt 4.00% - 4.50% 4.25%
WACC 5.3% - 7.1% 6.2%
WACC

CL WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.38 0.47
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.60% 7.50%
Tax rate 23.70% 25.00%
Debt/Equity ratio 0.11 0.11
Cost of debt 4.00% 4.50%
After-tax WACC 5.3% 7.1%
Selected WACC 6.2%

CL'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 CL:

cost_of_equity (6.55%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.38) + 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.