Question 1

What is Hormel Foods Corporation's WACC?

Accepted Answer

Hormel Foods Corporation (HRL) has a Weighted Average Cost of Capital (WACC) of 5.72%. This is calculated using a Cost of Equity of 6.43% (via CAPM with a beta of 0.16) and a pre-tax Cost of Debt of 2.75%, with an equity weight of 83.20% in the capital structure.

Question 2

Is Hormel Foods Corporation's WACC high or low?

Accepted Answer

Hormel Foods Corporation's WACC of 5.72% 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 Hormel Foods Corporation's WACC calculated?

Accepted Answer

Hormel Foods Corporation's WACC is calculated using the formula: WACC = (E/V × Re) + (D/V × Rd × (1-T)). The Cost of Equity (Re) of 6.43% is derived from the CAPM model using a beta of 0.16. The pre-tax Cost of Debt (Rd) is 2.75%. The capital structure is 83.20% equity and 16.80% debt.

Hormel Foods Corporation (HRL) — WACC 分析

WACC 构成

解读

Hormel Foods Corporation（HRL）WACC：5.72%

WACC计算器

Hormel Foods Corporation（HRL） WACC 解读

HRL 公司分析

HRL DCF 估值

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