OPCH
Option Care Health Inc
Price:  
31.70 
USD
Volume:  
3,098,960.00
United States | Health Care Providers & Services
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OPCH WACC - Weighted Average Cost of Capital

The WACC of Option Care Health Inc (OPCH) is 8.0%.

The Cost of Equity of Option Care Health Inc (OPCH) is 8.80%.
The Cost of Debt of Option Care Health Inc (OPCH) is 5.50%.

Range Selected
Cost of equity 6.80% - 10.80% 8.80%
Tax rate 25.50% - 26.10% 25.80%
Cost of debt 5.10% - 5.90% 5.50%
WACC 6.2% - 9.7% 8.0%
WACC

OPCH WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.63 1.05
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.80% 10.80%
Tax rate 25.50% 26.10%
Debt/Equity ratio 0.21 0.21
Cost of debt 5.10% 5.90%
After-tax WACC 6.2% 9.7%
Selected WACC 8.0%

OPCH'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 OPCH:

cost_of_equity (8.80%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.63) + 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.