M
Macy's Inc
Price:  
12.53 
USD
Volume:  
5,279,287.00
United States | Multiline Retail
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Macy WACC - Weighted Average Cost of Capital

The WACC of Macy's Inc (M) is 7.2%.

The Cost of Equity of Macy's Inc (M) is 9.45%.
The Cost of Debt of Macy's Inc (M) is 5.70%.

Range Selected
Cost of equity 8.00% - 10.90% 9.45%
Tax rate 18.80% - 22.80% 20.80%
Cost of debt 5.10% - 6.30% 5.70%
WACC 6.3% - 8.2% 7.2%
WACC

Macy WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.9 1.07
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.00% 10.90%
Tax rate 18.80% 22.80%
Debt/Equity ratio 0.8 0.8
Cost of debt 5.10% 6.30%
After-tax WACC 6.3% 8.2%
Selected WACC 7.2%

Macy'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 Macy:

cost_of_equity (9.45%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.9) + 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.