Question 1

What is Lowe's Companies Inc.'s WACC?

Accepted Answer

Lowe's Companies Inc. (LOW) has a Weighted Average Cost of Capital (WACC) of 6.67%. This is calculated using a Cost of Equity of 8.28% (via CAPM with a beta of 0.85) and a pre-tax Cost of Debt of 2.00%, with an equity weight of 76.01% in the capital structure.

Question 2

Is Lowe's Companies Inc.'s WACC high or low?

Accepted Answer

Lowe's Companies Inc.'s WACC of 6.67% 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 Lowe's Companies Inc.'s WACC calculated?

Accepted Answer

Lowe's Companies Inc.'s WACC is calculated using the formula: WACC = (E/V × Re) + (D/V × Rd × (1-T)). The Cost of Equity (Re) of 8.28% is derived from the CAPM model using a beta of 0.85. The pre-tax Cost of Debt (Rd) is 2.00%. The capital structure is 76.01% equity and 23.99% debt.

Lowe's Companies Inc. (LOW) — WACC 分析

WACC 构成

解读

Lowe's Companies Inc.（LOW）WACC：6.67%

WACC计算器

Lowe's Companies Inc.（LOW） WACC 解读

LOW 公司分析

LOW DCF 估值

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