WEN
Wendys Co
Price:  
11.68 
USD
Volume:  
3,704,335
United States | Hotels, Restaurants & Leisure

Wendys WACC - Weighted Average Cost of Capital

The WACC of Wendys Co (WEN) is 6.4%.

The Cost of Equity of Wendys Co (WEN) is 9.55%.
The Cost of Debt of Wendys Co (WEN) is 5.8%.

RangeSelected
Cost of equity7.5% - 11.6%9.55%
Tax rate25.3% - 27.0%26.15%
Cost of debt4.6% - 7.0%5.8%
WACC5.0% - 7.7%6.4%
WACC

Wendys WACC calculation

CategoryLowHigh
Long-term bond rate3.9%4.4%
Equity market risk premium4.6%5.6%
Adjusted beta0.791.2
Additional risk adjustments0.0%0.5%
Cost of equity7.5%11.6%
Tax rate25.3%27.0%
Debt/Equity ratio
1.51.5
Cost of debt4.6%7.0%
After-tax WACC5.0%7.7%
Selected WACC6.4%

Wendys'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 Wendys:

cost_of_equity (9.55%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.79) + 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.