THS
TreeHouse Foods Inc
Price:  
22.46 
USD
Volume:  
499,532.00
United States | Food Products
Valuation
Overview
Financials
Forecast
Compare
Historical Price
SolvencyDividends
Transactions
People

THS WACC - Weighted Average Cost of Capital

The WACC of TreeHouse Foods Inc (THS) is 5.9%.

The Cost of Equity of TreeHouse Foods Inc (THS) is 7.25%.
The Cost of Debt of TreeHouse Foods Inc (THS) is 6.15%.

Range Selected
Cost of equity 5.70% - 8.80% 7.25%
Tax rate 19.70% - 24.00% 21.85%
Cost of debt 4.80% - 7.50% 6.15%
WACC 4.7% - 7.1% 5.9%
WACC

THS 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 0.7
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.70% 8.80%
Tax rate 19.70% 24.00%
Debt/Equity ratio 1.24 1.24
Cost of debt 4.80% 7.50%
After-tax WACC 4.7% 7.1%
Selected WACC 5.9%

THS'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 THS:

cost_of_equity (7.25%) = 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.