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Broadcom Inc. Common Stock (AVGO) — WACC Analysis

WACC Breakdown

Broadcom Inc. Common Stock (AVGO) has a weighted average cost of capital (WACC) of 8.8%. The cost of equity is 9.0%, derived from a beta of 1.00 and a risk-free rate of 4.7%. The after-tax cost of debt is 4.0%. The capital structure is 96.6% equity and 3.4% debt.

Interpretation

A WACC of 8.8% is moderate, reflecting the market's balanced risk assessment of Broadcom Inc. Common Stock.

Investors can compare AVGO's WACC of 8.8% against industry peers to gauge its relative financing costs. A beta of 1.00 reflects the stock's volatility relative to the broader market.

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VALUATION

AVGO WACC: 8.79% for Broadcom Inc. Common Stock

Current inputs imply a 8.96% cost of equity and a 5.02% pre-tax cost of debt. Use this discount rate as a starting point for DCF validation.

[01]Current Market Data
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[02]
WACC Calculation Process
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Market Data Loaded
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Company Data Fetched
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Beta Calculated (5Y)
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Inputs Auto-Populated
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WACC Calculated
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Step 2: Enter Ticker Symbol
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Step 4: Review Auto-Populated WACC Inputs

Values are automatically populated from real data. You can adjust them manually if needed.

4.30%
1.000
4.23%
5.00%
21.00%
70.00%
Debt: 30.00%Equity: 70.00%

Please enter a valid company ticker to calculate WACC

Broadcom Inc. Common Stock Common Stock (AVGO) WACC Results
Weighted Average Cost of Capital
8.79%
Cost of Equity
8.96%
Risk-Free Rate4.73%
Beta1.00
Market Risk Premium4.23%
Cost of Debt
3.97%
Pre-Tax Cost of Debt5.02%
Tax Rate21.00%
Tax Shield1.05%
Capital Structure
Equity: 96.55%($1754.55B)
Debt: 3.45%($62.66B)
Equity Component
8.65%
96.55% × 8.96%
Debt Component
0.14%
3.45% × 3.97%

Broadcom Inc. Common Stock (AVGO) WACC in context

Broadcom Inc. Common Stock (AVGO) currently screens with an estimated WACC of 8.79%. That blends a 8.96% cost of equity, a 5.02% pre-tax cost of debt, and a 96.55% equity weight into the discount rate you would typically use in a DCF model.

falls into a common range for established public companies and is a practical DCF starting point.

What AVGO WACC implies

A 8.79% discount rate falls into a common range for established public companies and is a practical DCF starting point.

How this page calculates AVGO

This page combines CAPM-based cost of equity with SEC-derived debt and capital structure inputs. The current beta is 1.00 and equity accounts for 96.55% of capital.

What to do next

Validate business quality on the company page, then carry the same discount-rate assumptions into the DCF page to test fair value sensitivity.

Disclaimer: This is not financial advice. Data sourced from SEC EDGAR and Polygon.io. Past performance does not guarantee future results. Always conduct your own research before making investment decisions.