GWW
W W Grainger Inc
Price:  
1,068.00 
USD
Volume:  
310,700.00
United States | Trading Companies & Distributors
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GWW WACC - Weighted Average Cost of Capital

The WACC of W W Grainger Inc (GWW) is 8.6%.

The Cost of Equity of W W Grainger Inc (GWW) is 8.85%.
The Cost of Debt of W W Grainger Inc (GWW) is 4.40%.

Range Selected
Cost of equity 7.90% - 9.80% 8.85%
Tax rate 23.50% - 24.30% 23.90%
Cost of debt 4.30% - 4.50% 4.40%
WACC 7.6% - 9.5% 8.6%
WACC

GWW WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.87 0.89
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.90% 9.80%
Tax rate 23.50% 24.30%
Debt/Equity ratio 0.05 0.05
Cost of debt 4.30% 4.50%
After-tax WACC 7.6% 9.5%
Selected WACC 8.6%

GWW'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 GWW:

cost_of_equity (8.85%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.87) + 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.