Viatris WACC - Weighted Average Cost of Capital
The WACC of Viatris Inc (VTRS) is 5.8%.
| Range | Selected | |
| Cost of equity | 7.7% - 11.2% | 9.45% |
| Tax rate | 18.5% - 44.9% | 31.7% |
| Cost of debt | 4.0% - 5.3% | 4.65% |
| WACC | 5.2% - 6.5% | 5.8% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.84 | 1.13 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.7% | 11.2% |
| Tax rate | 18.5% | 44.9% |
| Debt/Equity ratio | 1.34 | 1.34 |
| Cost of debt | 4.0% | 5.3% |
| After-tax WACC | 5.2% | 6.5% |
| Selected WACC | 5.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| VTRS | Viatris Inc | 1.34 | 0.85 | 0.43 |
| ACB.TO | Aurora Cannabis Inc | 0.28 | 1.52 | 1.26 |
| BHC.TO | Bausch Health Companies Inc | 12.78 | 1.06 | 0.1 |
| CTLT | Catalent Inc | 0.43 | 0.41 | 0.31 |
| CURA.CN | Curaleaf Holdings Inc | 0.23 | 1.48 | 1.26 |
| ENDP | Endo International PLC | 113.89 | 1.1 | 0.01 |
| GTII.CN | Green Thumb Industries Inc | 0.22 | 0.95 | 0.82 |
| HZNP | Horizon Therapeutics PLC | 0.1 | -0.28 | -0.27 |
| JAZZ | Jazz Pharmaceuticals PLC | 1.01 | 0.79 | 0.45 |
| TRUL.CN | Trulieve Cannabis Corp | 1.04 | 1.5 | 0.85 |
| Low | High | |
| Unlevered beta | 0.38 | 0.6 |
| Relevered beta | 0.76 | 1.19 |
| Adjusted relevered beta | 0.84 | 1.13 |
Viatris'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 Viatris:
cost_of_equity (9.45%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.84) + 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.