Petco Health and Wellness Company Inc (WOOF) WACC Analysis

As of May 27, 2025, Petco Health and Wellness Company Inc (WOOF) carries a Weighted Average Cost of Capital (WACC) of 12.6%. WACC reflects the blended rate Petco Health and Wellness Company Inc must pay to both equity and debt holders.

Within that, the cost of equity is 9.7%, the cost of debt is 6.6%, and the effective tax rate is 7.1%.

Breakdown of WACC Components

• Long-term bond rate: 3.9% – 4.4%
• Equity market risk premium: 4.6% – 5.6%
• Adjusted beta: 1.27 – 1.62
• Additional risk adjustment: 0.0% – 0.5%
• Debt-to-equity ratio: 1.39

What It Means for Investors

With a selected WACC of 12.6%, Petco Health and Wellness Company Inc must ensure any new investment returns exceed this threshold to generate shareholder value. This level reflects a relatively high financing requirement.