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Verizon Communications (VZ) — WACC Analysis

WACC Breakdown

Verizon Communications (VZ) has a weighted average cost of capital (WACC) of 6.9%. The cost of equity is 9.0%, derived from a beta of 1.00 and a risk-free rate of 4.7%. The after-tax cost of debt is 4.0%. The capital structure is 58.9% equity and 41.1% debt.

Interpretation

A WACC of 6.9% suggests that the market views Verizon Communications as relatively low-risk, with a lower cost of financing.

Investors can compare VZ's WACC of 6.9% against industry peers to gauge its relative financing costs. A beta of 1.00 reflects the stock's volatility relative to the broader market.

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VALUATION

VZ WACC: 6.95% for Verizon Communications

Current inputs imply a 8.97% cost of equity and a 5.12% 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

Verizon Communications Common Stock (VZ) WACC Results
Weighted Average Cost of Capital
6.95%
Cost of Equity
8.97%
Risk-Free Rate4.74%
Beta1.00
Market Risk Premium4.23%
Cost of Debt
4.05%
Pre-Tax Cost of Debt5.12%
Tax Rate21.00%
Tax Shield1.08%
Capital Structure
Equity: 58.89%($205.45B)
Debt: 41.11%($143.45B)
Equity Component
5.28%
58.89% × 8.97%
Debt Component
1.66%
41.11% × 4.05%

Verizon Communications (VZ) WACC in context

Verizon Communications (VZ) currently screens with an estimated WACC of 6.95%. That blends a 8.97% cost of equity, a 5.12% pre-tax cost of debt, and a 58.89% 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 VZ WACC implies

A 6.95% discount rate screens as a relatively low discount rate, which usually supports higher DCF values.

How this page calculates VZ

This page combines CAPM-based cost of equity with SEC-derived debt and capital structure inputs. The current beta is 1.00 and equity accounts for 58.89% 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.