TSN
Tyson Foods Inc
Price:  
60.79 
USD
Volume:  
3,867,944.00
United States | Food Products
Valuation
Overview
Financials
Forecast
Compare
Historical Price
SolvencyDividends
Transactions
People

Tyson WACC - Weighted Average Cost of Capital

The WACC of Tyson Foods Inc (TSN) is 5.3%.

The Cost of Equity of Tyson Foods Inc (TSN) is 6.00%.
The Cost of Debt of Tyson Foods Inc (TSN) is 4.75%.

Range Selected
Cost of equity 5.20% - 6.80% 6.00%
Tax rate 22.00% - 23.10% 22.55%
Cost of debt 4.20% - 5.30% 4.75%
WACC 4.6% - 5.9% 5.3%
WACC

Tyson WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.3 0.34
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.20% 6.80%
Tax rate 22.00% 23.10%
Debt/Equity ratio 0.45 0.45
Cost of debt 4.20% 5.30%
After-tax WACC 4.6% 5.9%
Selected WACC 5.3%

Tyson'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 Tyson:

cost_of_equity (6.00%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.3) + 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.