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CVS HEALTH CORPORATION (CVS) — WACC Analysis

WACC Breakdown

CVS HEALTH CORPORATION (CVS) has a weighted average cost of capital (WACC) of 6.6%. The cost of equity is 7.9%, derived from a beta of 0.44 and a risk-free rate of 5.3%. The after-tax cost of debt is 4.1%. The capital structure is 65.4% equity and 34.6% debt.

Interpretation

A WACC of 6.6% suggests that the market views CVS HEALTH CORPORATION as relatively low-risk, with a lower cost of financing.

Investors can compare CVS's WACC of 6.6% against industry peers to gauge its relative financing costs. A beta of 0.44 reflects the stock's volatility relative to the broader market.

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VALUATION

CVS WACC: 6.61% for CVS HEALTH CORPORATION

Current inputs imply a 7.93% cost of equity and a 5.22% 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

CVS HEALTH CORPORATION Common Stock (CVS) WACC Results
Weighted Average Cost of Capital
6.61%
Cost of Equity
7.93%
Risk-Free Rate5.28%
Beta0.44
Market Risk Premium4.23%
Cost of Debt
4.12%
Pre-Tax Cost of Debt5.22%
Tax Rate21.00%
Tax Shield1.10%
Capital Structure
Equity: 65.42%($112.49B)
Debt: 34.58%($59.45B)
Equity Component
5.19%
65.42% × 7.93%
Debt Component
1.43%
34.58% × 4.12%

CVS HEALTH CORPORATION (CVS) WACC in context

CVS HEALTH CORPORATION (CVS) currently screens with an estimated WACC of 6.61%. That blends a 7.93% cost of equity, a 5.22% pre-tax cost of debt, and a 65.42% equity weight into the discount rate you would typically use in a DCF model.

screens as a relatively low discount rate, which usually supports higher DCF values.

What CVS WACC implies

A 6.61% discount rate screens as a relatively low discount rate, which usually supports higher DCF values.

How this page calculates CVS

This page combines CAPM-based cost of equity with SEC-derived debt and capital structure inputs. The current beta is 0.44 and equity accounts for 65.42% 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.