Question 1

What is Culp, Inc. Common Stock's WACC?

Accepted Answer

Culp, Inc. Common Stock (CULP) has a Weighted Average Cost of Capital (WACC) of 6.22%. This is calculated using a Cost of Equity of 6.94% (via CAPM with a beta of 0.45) and a pre-tax Cost of Debt of 2.85%, with an equity weight of 82.45% in the capital structure.

Question 2

Is Culp, Inc. Common Stock's WACC high or low?

Accepted Answer

Culp, Inc. Common Stock's WACC of 6.22% is below the typical range of 8-12% for most companies, indicating relatively low cost of capital and lower risk. WACC is used as the discount rate in DCF valuations — a lower WACC results in higher present values of future cash flows.

Question 3

How is Culp, Inc. Common Stock's WACC calculated?

Accepted Answer

Culp, Inc. Common Stock's WACC is calculated using the formula: WACC = (E/V × Re) + (D/V × Rd × (1-T)). The Cost of Equity (Re) of 6.94% is derived from the CAPM model using a beta of 0.45. The pre-tax Cost of Debt (Rd) is 2.85%. The capital structure is 82.45% equity and 17.55% debt.

Culp, Inc. Common Stock (CULP) — WACC 分析

WACC 构成

解读

Culp, Inc. Common Stock（CULP）WACC：6.22%

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Culp, Inc. Common Stock（CULP） WACC 解读

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