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Encompass Health Corporation Common Stock (EHC) — WACC Analysis

WACC Breakdown

Encompass Health Corporation Common Stock (EHC) has a weighted average cost of capital (WACC) of 7.2%. The cost of equity is 7.9%, derived from a beta of 0.53 and a risk-free rate of 5.0%. The after-tax cost of debt is 3.8%. The capital structure is 83.1% equity and 16.9% debt.

Interpretation

A WACC of 7.2% suggests that the market views Encompass Health Corporation Common Stock as relatively low-risk, with a lower cost of financing.

Investors can compare EHC's WACC of 7.2% against industry peers to gauge its relative financing costs. A beta of 0.53 reflects the stock's volatility relative to the broader market.

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VALUATION

EHC WACC: 7.19% for Encompass Health Corporation Common Stock

Current inputs imply a 7.88% cost of equity and a 4.77% pre-tax cost of debt. Use this discount rate as a starting point for DCF validation.

[01]Current Market Data
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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

Encompass Health Corporation Common Stock Common Stock (EHC) WACC Results
Weighted Average Cost of Capital
7.19%
Cost of Equity
7.88%
Risk-Free Rate4.98%
Beta0.53
Market Risk Premium4.23%
Cost of Debt
3.77%
Pre-Tax Cost of Debt4.77%
Tax Rate21.00%
Tax Shield1.00%
Capital Structure
Equity: 83.07%($12.93B)
Debt: 16.93%($2634.00M)
Equity Component
6.55%
83.07% × 7.88%
Debt Component
0.64%
16.93% × 3.77%

Encompass Health Corporation Common Stock (EHC) WACC in context

Encompass Health Corporation Common Stock (EHC) currently screens with an estimated WACC of 7.19%. That blends a 7.88% cost of equity, a 4.77% pre-tax cost of debt, and a 83.07% 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 EHC WACC implies

A 7.19% discount rate screens as a relatively low discount rate, which usually supports higher DCF values.

How this page calculates EHC

This page combines CAPM-based cost of equity with SEC-derived debt and capital structure inputs. The current beta is 0.53 and equity accounts for 83.07% 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.