OPCH
Option Care Health Inc
Price:  
29.94 
USD
Volume:  
1,624,632
United States | Health Care Providers & Services

OPCH WACC - Weighted Average Cost of Capital

The WACC of Option Care Health Inc (OPCH) is 7.4%.

The Cost of Equity of Option Care Health Inc (OPCH) is 8.15%.
The Cost of Debt of Option Care Health Inc (OPCH) is 5.5%.

RangeSelected
Cost of equity6.8% - 9.5%8.15%
Tax rate25.5% - 26.1%25.8%
Cost of debt5.1% - 5.9%5.5%
WACC6.2% - 8.5%7.4%
WACC

OPCH WACC calculation

CategoryLowHigh
Long-term bond rate3.9%4.4%
Equity market risk premium4.6%5.6%
Adjusted beta0.640.82
Additional risk adjustments0.0%0.5%
Cost of equity6.8%9.5%
Tax rate25.5%26.1%
Debt/Equity ratio
0.230.23
Cost of debt5.1%5.9%
After-tax WACC6.2%8.5%
Selected WACC7.4%

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 (8.15%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.64) + 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.