SHLDQ WACC - Weighted Average Cost of Capital

The WACC of Sears Holdings Corp (SHLDQ) is 6.8%.

The Cost of Equity of Sears Holdings Corp (SHLDQ) is 152.70%.

The Cost of Debt of Sears Holdings Corp (SHLDQ) is 7.40%.

	Range	Selected
Cost of equity	28.60% - 276.80%	152.70%
Tax rate	10.80% - 13.80%	12.30%
Cost of debt	7.00% - 7.80%	7.40%
WACC	6.3% - 7.2%	6.8%

WACC

SHLDQ WACC calculation

Category	Low	High

Long-term bond rate	3.9%	4.4%
Equity market risk premium	4.6%	5.6%
Adjusted beta	5.37	48.56

Additional risk adjustments	0.0%	0.5%
Cost of equity	28.60%	276.80%

Tax rate	10.80%	13.80%
Debt/Equity ratio	547.02	547.02
Cost of debt	7.00%	7.80%

After-tax WACC	6.3%	7.2%


Selected WACC	6.8%

SHLDQ'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 SHLDQ:

cost_of_equity (152.70%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (5.37) + 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.