Johnson & Johnson (JNJ) WACC Analysis

As of May 22, 2025, Johnson & Johnson (JNJ) carries a Weighted Average Cost of Capital (WACC) of 6.8%. WACC reflects the blended rate Johnson & Johnson must pay to both equity and debt holders.

Within that, the cost of equity is 6.0%, the cost of debt is 5.1%, and the effective tax rate is 12.2%.

Breakdown of WACC Components

• Long-term bond rate: 3.9% – 4.4%
• Equity market risk premium: 4.6% – 5.6%
• Adjusted beta: 0.47 – 0.52
• Additional risk adjustment: 0.0% – 0.5%
• Debt-to-equity ratio: 0.1

What It Means for Investors

With a selected WACC of 6.8%, Johnson & Johnson must ensure any new investment returns exceed this threshold to generate shareholder value. This level reflects an attractive low cost of capital.