CNC
Centene Corp
Price:  
56.41 
USD
Volume:  
5,207,262.00
United States | Health Care Providers & Services
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Centene WACC - Weighted Average Cost of Capital

The WACC of Centene Corp (CNC) is 6.3%.

The Cost of Equity of Centene Corp (CNC) is 8.00%.
The Cost of Debt of Centene Corp (CNC) is 5.00%.

Range Selected
Cost of equity 6.30% - 9.70% 8.00%
Tax rate 25.80% - 29.90% 27.85%
Cost of debt 5.00% - 5.00% 5.00%
WACC 5.3% - 7.3% 6.3%
WACC

Centene WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.53 0.87
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.30% 9.70%
Tax rate 25.80% 29.90%
Debt/Equity ratio 0.66 0.66
Cost of debt 5.00% 5.00%
After-tax WACC 5.3% 7.3%
Selected WACC 6.3%

Centene's CAPM model and how its cost of Equity is calculated

The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.

This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.

Here’s how we figure out the cost of equity for Centene:

cost_of_equity (8.00%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.53) + risk_adjustments (0.25%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.