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Johnson & Johnson (JNJ) — WACC Analysis

WACC Breakdown

Johnson & Johnson (JNJ) has a weighted average cost of capital (WACC) of 6.7%. The cost of equity is 7.1%, derived from a beta of 0.16 and a risk-free rate of 5.3%. The after-tax cost of debt is 1.6%. The capital structure is 92.6% equity and 7.4% debt.

Interpretation

A WACC of 6.7% suggests that the market views Johnson & Johnson as relatively low-risk, with a lower cost of financing.

Investors can compare JNJ's WACC of 6.7% against industry peers to gauge its relative financing costs. A beta of 0.16 reflects the stock's volatility relative to the broader market.

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VALUATION

JNJ WACC: 6.74% for Johnson & Johnson

Current inputs imply a 7.14% cost of equity and a 2.06% 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

Johnson & Johnson Common Stock (JNJ) WACC Results
Weighted Average Cost of Capital
6.74%
Cost of Equity
7.14%
Risk-Free Rate5.28%
Beta0.16
Market Risk Premium4.23%
Cost of Debt
1.63%
Pre-Tax Cost of Debt2.06%
Tax Rate21.00%
Tax Shield0.43%
Capital Structure
Equity: 92.65%($618.09B)
Debt: 7.35%($49.04B)
Equity Component
6.62%
92.65% × 7.14%
Debt Component
0.12%
7.35% × 1.63%

Johnson & Johnson (JNJ) WACC in context

Johnson & Johnson (JNJ) currently screens with an estimated WACC of 6.74%. That blends a 7.14% cost of equity, a 2.06% pre-tax cost of debt, and a 92.65% 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 JNJ WACC implies

A 6.74% discount rate screens as a relatively low discount rate, which usually supports higher DCF values.

How this page calculates JNJ

This page combines CAPM-based cost of equity with SEC-derived debt and capital structure inputs. The current beta is 0.16 and equity accounts for 92.65% 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.