PFGC
Performance Food Group Co
Price:  
89.56 
USD
Volume:  
1,204,432.00
United States | Food & Staples Retailing
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PFGC WACC - Weighted Average Cost of Capital

The WACC of Performance Food Group Co (PFGC) is 6.7%.

The Cost of Equity of Performance Food Group Co (PFGC) is 7.30%.
The Cost of Debt of Performance Food Group Co (PFGC) is 6.30%.

Range Selected
Cost of equity 5.70% - 8.90% 7.30%
Tax rate 27.00% - 29.40% 28.20%
Cost of debt 5.60% - 7.00% 6.30%
WACC 5.3% - 8.0% 6.7%
WACC

PFGC WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.39 0.73
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.70% 8.90%
Tax rate 27.00% 29.40%
Debt/Equity ratio 0.29 0.29
Cost of debt 5.60% 7.00%
After-tax WACC 5.3% 8.0%
Selected WACC 6.7%

PFGC'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 PFGC:

cost_of_equity (7.30%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.39) + 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.