SWK
Stanley Black & Decker Inc
Price:  
61.39 
USD
Volume:  
3,739,212.00
United States | Machinery
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SWK WACC - Weighted Average Cost of Capital

The WACC of Stanley Black & Decker Inc (SWK) is 8.2%.

The Cost of Equity of Stanley Black & Decker Inc (SWK) is 11.00%.
The Cost of Debt of Stanley Black & Decker Inc (SWK) is 5.00%.

Range Selected
Cost of equity 9.30% - 12.70% 11.00%
Tax rate 22.50% - 25.00% 23.75%
Cost of debt 5.00% - 5.00% 5.00%
WACC 7.2% - 9.2% 8.2%
WACC

SWK WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.17 1.4
Additional risk adjustments 0.0% 0.5%
Cost of equity 9.30% 12.70%
Tax rate 22.50% 25.00%
Debt/Equity ratio 0.64 0.64
Cost of debt 5.00% 5.00%
After-tax WACC 7.2% 9.2%
Selected WACC 8.2%

SWK'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 SWK:

cost_of_equity (11.00%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.17) + 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.