K
Kellogg Co
Price:  
79.53 
USD
Volume:  
4,498,174.00
United States | Food Products
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Kellogg WACC - Weighted Average Cost of Capital

The WACC of Kellogg Co (K) is 5.8%.

The Cost of Equity of Kellogg Co (K) is 6.25%.
The Cost of Debt of Kellogg Co (K) is 4.45%.

Range Selected
Cost of equity 5.50% - 7.00% 6.25%
Tax rate 19.60% - 21.90% 20.75%
Cost of debt 4.00% - 4.90% 4.45%
WACC 5.1% - 6.5% 5.8%
WACC

Kellogg WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.35 0.38
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.50% 7.00%
Tax rate 19.60% 21.90%
Debt/Equity ratio 0.21 0.21
Cost of debt 4.00% 4.90%
After-tax WACC 5.1% 6.5%
Selected WACC 5.8%

Kellogg'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 Kellogg:

cost_of_equity (6.25%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.35) + 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.