BX
Blackstone Group Inc
Price:  
155.13 
USD
Volume:  
2,048,009
United States | Capital Markets

Blackstone WACC - Weighted Average Cost of Capital

The WACC of Blackstone Group Inc (BX) is 8.1%.

The Cost of Equity of Blackstone Group Inc (BX) is 8.35%.
The Cost of Debt of Blackstone Group Inc (BX) is 4.25%.

RangeSelected
Cost of equity6.9% - 9.8%8.35%
Tax rate13.6% - 14.5%14.05%
Cost of debt4.0% - 4.5%4.25%
WACC6.7% - 9.4%8.1%
WACC

Blackstone WACC calculation

CategoryLowHigh
Long-term bond rate3.9%4.4%
Equity market risk premium4.6%5.6%
Adjusted beta0.670.88
Additional risk adjustments0.0%0.5%
Cost of equity6.9%9.8%
Tax rate13.6%14.5%
Debt/Equity ratio
0.060.06
Cost of debt4.0%4.5%
After-tax WACC6.7%9.4%
Selected WACC8.1%

Blackstone'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 Blackstone:

cost_of_equity (8.35%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.67) + 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.