For Kraft take a look at their bonds http://reports.finance.yahoo.com/z1?is=Kraft
so cost of debt is about 6-7% at the market.
Cost of equity; Yahoo says a beta of .6 use the ten year for risk free 3.7% market premium of 7% and you get 3.7%+.6*(7%-3.7)=5.68%
I used 7% for the market premium and rounded up to 7% for the bonds also rounded up long term debt. Using CAPM for the Equity premium the way I did it is not the best way but makes it easy to understand.
Play with the numbers to see what you come up with a change of 1% can have a big difference in the valuation. So the short answer is 6-8% range looks accurate.
One word of warning though this only gives you a starting point to work with you need to study the finacials and the notes to them and make note of items that may effect the future returns of Kraft like the recent rise in debt levels. This will give you somewhat of a starting point but this disscussion should move over to Elitefinanceprofessor.com now.
