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Best Buy Company, Inc. (BBY) — WACC Analysis

WACC Breakdown

Best Buy Company, Inc. (BBY) has a weighted average cost of capital (WACC) of 9.3%. The cost of equity is 9.7%, derived from a beta of 1.09 and a risk-free rate of 5.2%. The after-tax cost of debt is 3.0%. The capital structure is 94.4% equity and 5.6% debt.

Interpretation

A WACC of 9.3% is moderate, reflecting the market's balanced risk assessment of Best Buy Company, Inc..

Investors can compare BBY's WACC of 9.3% against industry peers to gauge its relative financing costs. A beta of 1.09 reflects the stock's volatility relative to the broader market.

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VALUATION

BBY WACC: 9.30% for Best Buy Company, Inc.

Current inputs imply a 9.67% cost of equity and a 3.85% 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

Best Buy Company, Inc. Common Stock (BBY) WACC Results
Weighted Average Cost of Capital
9.30%
Cost of Equity
9.67%
Risk-Free Rate5.19%
Beta1.09
Market Risk Premium4.23%
Cost of Debt
3.04%
Pre-Tax Cost of Debt3.85%
Tax Rate21.00%
Tax Shield0.81%
Capital Structure
Equity: 94.41%($19.75B)
Debt: 5.59%($1169.00M)
Equity Component
9.13%
94.41% × 9.67%
Debt Component
0.17%
5.59% × 3.04%

Best Buy Company, Inc. (BBY) WACC in context

Best Buy Company, Inc. (BBY) currently screens with an estimated WACC of 9.30%. That blends a 9.67% cost of equity, a 3.85% pre-tax cost of debt, and a 94.41% 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 BBY WACC implies

A 9.30% discount rate falls into a common range for established public companies and is a practical DCF starting point.

How this page calculates BBY

This page combines CAPM-based cost of equity with SEC-derived debt and capital structure inputs. The current beta is 1.09 and equity accounts for 94.41% 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.