FLO
Flowers Foods Inc
Price:  
16.48 
USD
Volume:  
2,908,899.00
United States | Food Products
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FLO WACC - Weighted Average Cost of Capital

The WACC of Flowers Foods Inc (FLO) is 5.7%.

The Cost of Equity of Flowers Foods Inc (FLO) is 6.45%.
The Cost of Debt of Flowers Foods Inc (FLO) is 4.30%.

Range Selected
Cost of equity 5.50% - 7.40% 6.45%
Tax rate 23.70% - 24.00% 23.85%
Cost of debt 4.00% - 4.60% 4.30%
WACC 5.0% - 6.5% 5.7%
WACC

FLO WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.36 0.45
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.50% 7.40%
Tax rate 23.70% 24.00%
Debt/Equity ratio 0.3 0.3
Cost of debt 4.00% 4.60%
After-tax WACC 5.0% 6.5%
Selected WACC 5.7%

FLO'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 FLO:

cost_of_equity (6.45%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.36) + 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.