LEG
Leggett & Platt Inc
Price:  
9.89 
USD
Volume:  
1,215,204.00
United States | Household Durables
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LEG WACC - Weighted Average Cost of Capital

The WACC of Leggett & Platt Inc (LEG) is 7.1%.

The Cost of Equity of Leggett & Platt Inc (LEG) is 11.65%.
The Cost of Debt of Leggett & Platt Inc (LEG) is 5.05%.

Range Selected
Cost of equity 9.50% - 13.80% 11.65%
Tax rate 22.10% - 22.80% 22.45%
Cost of debt 4.00% - 6.10% 5.05%
WACC 5.8% - 8.5% 7.1%
WACC

LEG WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.23 1.59
Additional risk adjustments 0.0% 0.5%
Cost of equity 9.50% 13.80%
Tax rate 22.10% 22.80%
Debt/Equity ratio 1.4 1.4
Cost of debt 4.00% 6.10%
After-tax WACC 5.8% 8.5%
Selected WACC 7.1%

LEG'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 LEG:

cost_of_equity (11.65%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.23) + 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.