VTR
Ventas Inc
Price:  
64.28 
USD
Volume:  
5,088,131.00
United States | Equity Real Estate Investment Trusts (REITs)
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Ventas WACC - Weighted Average Cost of Capital

The WACC of Ventas Inc (VTR) is 6.6%.

The Cost of Equity of Ventas Inc (VTR) is 6.65%.
The Cost of Debt of Ventas Inc (VTR) is 8.20%.

Range Selected
Cost of equity 5.60% - 7.70% 6.65%
Tax rate 26.40% - 28.50% 27.45%
Cost of debt 4.00% - 12.40% 8.20%
WACC 5.3% - 7.8% 6.6%
WACC

Ventas WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.39 0.5
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.60% 7.70%
Tax rate 26.40% 28.50%
Debt/Equity ratio 0.16 0.16
Cost of debt 4.00% 12.40%
After-tax WACC 5.3% 7.8%
Selected WACC 6.6%

Ventas'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 Ventas:

cost_of_equity (6.65%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.39) + 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.