UNFI
United Natural Foods Inc
Price:  
28.28 
USD
Volume:  
800,365.00
United States | Food & Staples Retailing
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UNFI WACC - Weighted Average Cost of Capital

The WACC of United Natural Foods Inc (UNFI) is 8.1%.

The Cost of Equity of United Natural Foods Inc (UNFI) is 8.65%.
The Cost of Debt of United Natural Foods Inc (UNFI) is 9.40%.

Range Selected
Cost of equity 6.60% - 10.70% 8.65%
Tax rate 18.40% - 19.00% 18.70%
Cost of debt 6.40% - 12.40% 9.40%
WACC 5.8% - 10.3% 8.1%
WACC

UNFI WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.6 1.04
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.60% 10.70%
Tax rate 18.40% 19.00%
Debt/Equity ratio 1.23 1.23
Cost of debt 6.40% 12.40%
After-tax WACC 5.8% 10.3%
Selected WACC 8.1%

UNFI'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 UNFI:

cost_of_equity (8.65%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.6) + 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.