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Darden Restaurants, Inc. (DRI) — WACC Analysis

WACC Breakdown

Darden Restaurants, Inc. (DRI) has a weighted average cost of capital (WACC) of 7.9%. The cost of equity is 8.2%, derived from a beta of 0.72 and a risk-free rate of 4.8%. The after-tax cost of debt is 4.3%. The capital structure is 91.5% equity and 8.5% debt.

Interpretation

A WACC of 7.9% suggests that the market views Darden Restaurants, Inc. as relatively low-risk, with a lower cost of financing.

Investors can compare DRI's WACC of 7.9% against industry peers to gauge its relative financing costs. A beta of 0.72 reflects the stock's volatility relative to the broader market.

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VALUATION

DRI WACC: 7.89% for Darden Restaurants, Inc.

Current inputs imply a 8.23% cost of equity and a 5.43% pre-tax cost of debt. Use this discount rate as a starting point for DCF validation.

[01]Current Market Data
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[02]
WACC Calculation Process
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Market Data Loaded
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Company Data Fetched
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Beta Calculated (5Y)
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Inputs Auto-Populated
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WACC Calculated
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Step 2: Enter Ticker Symbol
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Step 4: Review Auto-Populated WACC Inputs

Values are automatically populated from real data. You can adjust them manually if needed.

4.30%
1.000
4.23%
5.00%
21.00%
70.00%
Debt: 30.00%Equity: 70.00%

Please enter a valid company ticker to calculate WACC

Darden Restaurants, Inc. Common Stock (DRI) WACC Results
Weighted Average Cost of Capital
7.89%
Cost of Equity
8.23%
Risk-Free Rate4.79%
Beta0.72
Market Risk Premium4.23%
Cost of Debt
4.29%
Pre-Tax Cost of Debt5.43%
Tax Rate21.00%
Tax Shield1.14%
Capital Structure
Equity: 91.46%($24.98B)
Debt: 8.54%($2331.30M)
Equity Component
7.53%
91.46% × 8.23%
Debt Component
0.37%
8.54% × 4.29%

Darden Restaurants, Inc. (DRI) WACC in context

Darden Restaurants, Inc. (DRI) currently screens with an estimated WACC of 7.89%. That blends a 8.23% cost of equity, a 5.43% pre-tax cost of debt, and a 91.46% equity weight into the discount rate you would typically use in a DCF model.

screens as a relatively low discount rate, which usually supports higher DCF values.

What DRI WACC implies

A 7.89% discount rate screens as a relatively low discount rate, which usually supports higher DCF values.

How this page calculates DRI

This page combines CAPM-based cost of equity with SEC-derived debt and capital structure inputs. The current beta is 0.72 and equity accounts for 91.46% of capital.

What to do next

Validate business quality on the company page, then carry the same discount-rate assumptions into the DCF page to test fair value sensitivity.

Disclaimer: This is not financial advice. Data sourced from SEC EDGAR and Polygon.io. Past performance does not guarantee future results. Always conduct your own research before making investment decisions.