Question 1

What is Smithfield Foods, Inc. Common Stock's WACC?

Accepted Answer

Smithfield Foods, Inc. Common Stock (SFD) has a Weighted Average Cost of Capital (WACC) of 6.38%. This is calculated using a Cost of Equity of 6.99% (via CAPM with a beta of 0.34) and a pre-tax Cost of Debt of 2.71%, with an equity weight of 87.40% in the capital structure.

Question 2

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

Accepted Answer

Smithfield Foods, Inc. Common Stock's WACC of 6.38% 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 Smithfield Foods, Inc. Common Stock's WACC calculated?

Accepted Answer

Smithfield Foods, 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 6.99% is derived from the CAPM model using a beta of 0.34. The pre-tax Cost of Debt (Rd) is 2.71%. The capital structure is 87.40% equity and 12.60% debt.

Smithfield Foods, Inc. Common Stock (SFD) — WACC 分析

WACC 构成

解读

Smithfield Foods, Inc. Common Stock（SFD）WACC：6.38%

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Smithfield Foods, Inc. Common Stock（SFD） WACC 解读

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