VIAV
Viavi Solutions Inc
Price:  
9.17 
USD
Volume:  
2,485,156.00
United States | Communications Equipment
Valuation
Overview
Financials
Forecast
Compare
Historical Price
SolvencyDividends
Transactions
People

Viavi WACC - Weighted Average Cost of Capital

The WACC of Viavi Solutions Inc (VIAV) is 7.6%.

The Cost of Equity of Viavi Solutions Inc (VIAV) is 8.50%.
The Cost of Debt of Viavi Solutions Inc (VIAV) is 6.55%.

Range Selected
Cost of equity 6.60% - 10.40% 8.50%
Tax rate 26.20% - 27.00% 26.60%
Cost of debt 4.00% - 9.10% 6.55%
WACC 5.7% - 9.5% 7.6%
WACC

Viavi WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.59 0.99
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.60% 10.40%
Tax rate 26.20% 27.00%
Debt/Equity ratio 0.31 0.31
Cost of debt 4.00% 9.10%
After-tax WACC 5.7% 9.5%
Selected WACC 7.6%

Viavi'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 Viavi:

cost_of_equity (8.50%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.59) + 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.