Question 1

What is W.W. Grainger, Inc.'s WACC?

Accepted Answer

W.W. Grainger, Inc. (GWW) has a Weighted Average Cost of Capital (WACC) of 7.84%. This is calculated using a Cost of Equity of 8.05% (via CAPM with a beta of 0.77) and a pre-tax Cost of Debt of 3.36%, with an equity weight of 96.05% in the capital structure.

Question 2

Is W.W. Grainger, Inc.'s WACC high or low?

Accepted Answer

W.W. Grainger, Inc.'s WACC of 7.84% 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 W.W. Grainger, Inc.'s WACC calculated?

Accepted Answer

W.W. Grainger, Inc.'s WACC is calculated using the formula: WACC = (E/V × Re) + (D/V × Rd × (1-T)). The Cost of Equity (Re) of 8.05% is derived from the CAPM model using a beta of 0.77. The pre-tax Cost of Debt (Rd) is 3.36%. The capital structure is 96.05% equity and 3.95% debt.

W.W. Grainger, Inc. (GWW) — WACC 分析

WACC 构成

解读

W.W. Grainger, Inc.（GWW）WACC：7.84%

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W.W. Grainger, Inc.（GWW） WACC 解读

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