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McKesson Corporation (MCK) — WACC Analysis

WACC Breakdown

McKesson Corporation (MCK) has a weighted average cost of capital (WACC) of 7.0%. The cost of equity is 7.2%, derived from a beta of 0.21 and a risk-free rate of 5.2%. The after-tax cost of debt is 3.0%. The capital structure is 94.7% equity and 5.3% debt.

Interpretation

A WACC of 7.0% suggests that the market views McKesson Corporation as relatively low-risk, with a lower cost of financing.

Investors can compare MCK's WACC of 7.0% against industry peers to gauge its relative financing costs. A beta of 0.21 reflects the stock's volatility relative to the broader market.

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VALUATION

MCK WACC: 6.97% for McKesson Corporation

Current inputs imply a 7.19% cost of equity and a 3.80% 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

McKesson Corporation Common Stock (MCK) WACC Results
Weighted Average Cost of Capital
6.97%
Cost of Equity
7.19%
Risk-Free Rate5.19%
Beta0.21
Market Risk Premium4.23%
Cost of Debt
3.00%
Pre-Tax Cost of Debt3.80%
Tax Rate21.00%
Tax Shield0.80%
Capital Structure
Equity: 94.71%($116.43B)
Debt: 5.29%($6500.00M)
Equity Component
6.81%
94.71% × 7.19%
Debt Component
0.16%
5.29% × 3.00%

McKesson Corporation (MCK) WACC in context

McKesson Corporation (MCK) currently screens with an estimated WACC of 6.97%. That blends a 7.19% cost of equity, a 3.80% pre-tax cost of debt, and a 94.71% 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 MCK WACC implies

A 6.97% discount rate screens as a relatively low discount rate, which usually supports higher DCF values.

How this page calculates MCK

This page combines CAPM-based cost of equity with SEC-derived debt and capital structure inputs. The current beta is 0.21 and equity accounts for 94.71% 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.