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Home Depot, Inc. (HD) — WACC Analysis

WACC Breakdown

Home Depot, Inc. (HD) has a weighted average cost of capital (WACC) of 8.4%. The cost of equity is 9.0%, derived from a beta of 0.83 and a risk-free rate of 5.3%. The after-tax cost of debt is 4.3%. The capital structure is 86.6% equity and 13.4% debt.

Interpretation

A WACC of 8.4% is moderate, reflecting the market's balanced risk assessment of Home Depot, Inc..

Investors can compare HD's WACC of 8.4% against industry peers to gauge its relative financing costs. A beta of 0.83 reflects the stock's volatility relative to the broader market.

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VALUATION

HD WACC: 8.40% for Home Depot, Inc.

Current inputs imply a 9.03% cost of equity and a 5.50% 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

Home Depot, Inc. Common Stock (HD) WACC Results
Weighted Average Cost of Capital
8.40%
Cost of Equity
9.03%
Risk-Free Rate5.28%
Beta0.83
Market Risk Premium4.23%
Cost of Debt
4.34%
Pre-Tax Cost of Debt5.50%
Tax Rate21.00%
Tax Shield1.15%
Capital Structure
Equity: 86.64%($285.11B)
Debt: 13.36%($43.95B)
Equity Component
7.82%
86.64% × 9.03%
Debt Component
0.58%
13.36% × 4.34%

Home Depot, Inc. (HD) WACC in context

Home Depot, Inc. (HD) currently screens with an estimated WACC of 8.40%. That blends a 9.03% cost of equity, a 5.50% pre-tax cost of debt, and a 86.64% 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 HD WACC implies

A 8.40% discount rate falls into a common range for established public companies and is a practical DCF starting point.

How this page calculates HD

This page combines CAPM-based cost of equity with SEC-derived debt and capital structure inputs. The current beta is 0.83 and equity accounts for 86.64% 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.