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Valero Energy Corporation (VLO) — WACC Analysis

WACC Breakdown

Valero Energy Corporation (VLO) has a weighted average cost of capital (WACC) of 7.6%. The cost of equity is 7.9%, derived from a beta of 0.64 and a risk-free rate of 4.7%. The after-tax cost of debt is 4.3%. The capital structure is 90.7% equity and 9.3% debt.

Interpretation

A WACC of 7.6% suggests that the market views Valero Energy Corporation as relatively low-risk, with a lower cost of financing.

Investors can compare VLO's WACC of 7.6% against industry peers to gauge its relative financing costs. A beta of 0.64 reflects the stock's volatility relative to the broader market.

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VALUATION

VLO WACC: 7.60% for Valero Energy Corporation

Current inputs imply a 7.94% cost of equity and a 5.40% 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

Valero Energy Corporation Common Stock (VLO) WACC Results
Weighted Average Cost of Capital
7.60%
Cost of Equity
7.94%
Risk-Free Rate4.73%
Beta0.64
Market Risk Premium4.23%
Cost of Debt
4.27%
Pre-Tax Cost of Debt5.40%
Tax Rate21.00%
Tax Shield1.13%
Capital Structure
Equity: 90.68%($101.45B)
Debt: 9.32%($10.42B)
Equity Component
7.20%
90.68% × 7.94%
Debt Component
0.40%
9.32% × 4.27%

Valero Energy Corporation (VLO) WACC in context

Valero Energy Corporation (VLO) currently screens with an estimated WACC of 7.60%. That blends a 7.94% cost of equity, a 5.40% pre-tax cost of debt, and a 90.68% 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 VLO WACC implies

A 7.60% discount rate screens as a relatively low discount rate, which usually supports higher DCF values.

How this page calculates VLO

This page combines CAPM-based cost of equity with SEC-derived debt and capital structure inputs. The current beta is 0.64 and equity accounts for 90.68% 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.