TEVA.TA WACC - Weighted Average Cost of Capital

The WACC of Teva Pharmaceutical Industries Ltd (TEVA.TA) is 8.3%.

The Cost of Equity of Teva Pharmaceutical Industries Ltd (TEVA.TA) is 8.90%.

The Cost of Debt of Teva Pharmaceutical Industries Ltd (TEVA.TA) is 5.60%.

	Range	Selected
Cost of equity	7.70% - 10.10%	8.90%
Tax rate	18.10% - 25.00%	21.55%
Cost of debt	4.90% - 6.30%	5.60%
WACC	7.2% - 9.4%	8.3%

WACC

TEVA.TA WACC calculation

Category	Low	High

Long-term bond rate	4.8%	5.3%
Equity market risk premium	5.6%	6.6%
Adjusted beta	0.5	0.64

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.70%	10.10%

Tax rate	18.10%	25.00%
Debt/Equity ratio	0.16	0.16
Cost of debt	4.90%	6.30%

After-tax WACC	7.2%	9.4%


Selected WACC	8.3%

TEVA.TA'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 TEVA.TA:

cost_of_equity (8.90%) = risk_free_rate (5.05%) + equity_risk_premium (6.10%) * adjusted_beta (0.5) + 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.