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McDonald's Corporation (MCD) — WACC Analysis

WACC Breakdown

McDonald's Corporation (MCD) has a weighted average cost of capital (WACC) of 6.5%. The cost of equity is 7.2%, derived from a beta of 0.36 and a risk-free rate of 4.7%. The after-tax cost of debt is 3.2%. The capital structure is 82.8% equity and 17.2% debt.

Interpretation

A WACC of 6.5% suggests that the market views McDonald's Corporation as relatively low-risk, with a lower cost of financing.

Investors can compare MCD's WACC of 6.5% against industry peers to gauge its relative financing costs. A beta of 0.36 reflects the stock's volatility relative to the broader market.

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VALUATION

MCD WACC: 6.49% for McDonald's Corporation

Current inputs imply a 7.17% cost of equity and a 4.08% pre-tax cost of debt. Use this discount rate as a starting point for DCF validation.

[01]Current Market Data
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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

McDonald's Corporation Common Stock (MCD) WACC Results
Weighted Average Cost of Capital
6.49%
Cost of Equity
7.17%
Risk-Free Rate4.74%
Beta0.36
Market Risk Premium4.23%
Cost of Debt
3.22%
Pre-Tax Cost of Debt4.08%
Tax Rate21.00%
Tax Shield0.86%
Capital Structure
Equity: 82.79%($191.74B)
Debt: 17.21%($39.86B)
Equity Component
5.93%
82.79% × 7.17%
Debt Component
0.55%
17.21% × 3.22%

McDonald's Corporation (MCD) WACC in context

McDonald's Corporation (MCD) currently screens with an estimated WACC of 6.49%. That blends a 7.17% cost of equity, a 4.08% pre-tax cost of debt, and a 82.79% 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 MCD WACC implies

A 6.49% discount rate screens as a relatively low discount rate, which usually supports higher DCF values.

How this page calculates MCD

This page combines CAPM-based cost of equity with SEC-derived debt and capital structure inputs. The current beta is 0.36 and equity accounts for 82.79% 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.