WING
Wingstop Inc
Price:  
327.28 
USD
Volume:  
279,018.00
United States | Hotels, Restaurants & Leisure
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WING WACC - Weighted Average Cost of Capital

The WACC of Wingstop Inc (WING) is 7.0%.

The Cost of Equity of Wingstop Inc (WING) is 7.50%.
The Cost of Debt of Wingstop Inc (WING) is 4.30%.

Range Selected
Cost of equity 6.10% - 8.90% 7.50%
Tax rate 24.80% - 25.80% 25.30%
Cost of debt 4.00% - 4.60% 4.30%
WACC 5.7% - 8.2% 7.0%
WACC

WING WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.48 0.71
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.10% 8.90%
Tax rate 24.80% 25.80%
Debt/Equity ratio 0.13 0.13
Cost of debt 4.00% 4.60%
After-tax WACC 5.7% 8.2%
Selected WACC 7.0%

WING'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 WING:

cost_of_equity (7.50%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.48) + 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.