VTRS
Viatris Inc
Price:  
8.65 
USD
Volume:  
11,937,132.00
United States | Pharmaceuticals
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Viatris WACC - Weighted Average Cost of Capital

The WACC of Viatris Inc (VTRS) is 5.7%.

The Cost of Equity of Viatris Inc (VTRS) is 9.35%.
The Cost of Debt of Viatris Inc (VTRS) is 4.65%.

Range Selected
Cost of equity 7.70% - 11.00% 9.35%
Tax rate 18.50% - 44.90% 31.70%
Cost of debt 4.00% - 5.30% 4.65%
WACC 5.1% - 6.4% 5.7%
WACC

Viatris WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.82 1.1
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.70% 11.00%
Tax rate 18.50% 44.90%
Debt/Equity ratio 1.36 1.36
Cost of debt 4.00% 5.30%
After-tax WACC 5.1% 6.4%
Selected WACC 5.7%

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 (9.35%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.82) + 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.