WDC WACC - Weighted Average Cost of Capital
The WACC of Western Digital Corp (WDC) is 9.1%.
| Range | Selected | |
| Cost of equity | 9.3% - 12.4% | 10.85% |
| Tax rate | 17.0% - 24.0% | 20.5% |
| Cost of debt | 4.0% - 4.9% | 4.45% |
| WACC | 7.9% - 10.3% | 9.1% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 1.18 | 1.35 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.3% | 12.4% |
| Tax rate | 17.0% | 24.0% |
| Debt/Equity ratio | 0.32 | 0.32 |
| Cost of debt | 4.0% | 4.9% |
| After-tax WACC | 7.9% | 10.3% |
| Selected WACC | 9.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| WDC | Western Digital Corp | 0.32 | 2.32 | 1.85 |
| ALOT | AstroNova Inc | 0.53 | 0.88 | 0.62 |
| CAN | Canaan Inc | 0.02 | 1.22 | 1.2 |
| DBD | Diebold Nixdorf Inc | 0.42 | 1.21 | 0.9 |
| DDD | 3D Systems Corp | 0.96 | 1.71 | 0.97 |
| HPE | Hewlett Packard Enterprise Co | 0.67 | 1.89 | 1.23 |
| IGOI | iGO Inc | 0.92 | 0.89 | 0.52 |
| NNDM | Nano Dimension Ltd | 0.03 | 1.07 | 1.05 |
| NTAP | NetApp Inc | 0.15 | 1.52 | 1.36 |
| OSS | One Stop Systems Inc | 0.01 | 1.52 | 1.51 |
| STX | Seagate Technology PLC | 0.18 | 1.95 | 1.71 |
| Low | High | |
| Unlevered beta | 1.05 | 1.23 |
| Relevered beta | 1.27 | 1.52 |
| Adjusted relevered beta | 1.18 | 1.35 |
WDC'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 WDC:
cost_of_equity (10.85%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.18) + 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.