STX
Seagate Technology PLC
Price:  
93.07 
USD
Volume:  
3,408,121.00
Ireland | Technology Hardware, Storage & Peripherals
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Seagate WACC - Weighted Average Cost of Capital

The WACC of Seagate Technology PLC (STX) is 9.4%.

The Cost of Equity of Seagate Technology PLC (STX) is 10.80%.
The Cost of Debt of Seagate Technology PLC (STX) is 5.20%.

Range Selected
Cost of equity 9.10% - 12.50% 10.80%
Tax rate 2.60% - 4.30% 3.45%
Cost of debt 5.10% - 5.30% 5.20%
WACC 8.1% - 10.7% 9.4%
WACC

Seagate WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.14 1.37
Additional risk adjustments 0.0% 0.5%
Cost of equity 9.10% 12.50%
Tax rate 2.60% 4.30%
Debt/Equity ratio 0.32 0.32
Cost of debt 5.10% 5.30%
After-tax WACC 8.1% 10.7%
Selected WACC 9.4%

Seagate'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 Seagate:

cost_of_equity (10.80%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.14) + 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.